A lump-sum payment may be combined with a structured settlement in order to meet immediate expenses, such as medical bills, repayment of debts, rehabilitation costs, and the like.
Guidelines to use present value calculator for lump sum
Future value:
- The future lump sum value for which you want to find a present value
- It should be greater than zero
Number of Periods:
- No of periods are generally no of years in future that you expect your investment to be matured.
- It can be either a whole number or a decimal number in the case of partial period such as months
Example: 2 years and 6 months can be entered as 2.5 years
Interest rate per period:
- Annual nominal interest rate at which the future value of lump sum is discounted.
- It should be greater than zero.
Compounding per period:
- The frequency of compounding that occurs in a period.
- It can be annually, half-yearly, monthly, quarterly or daily.
Result:
- The calculated present value of future lump sum money.
Speaking of the structured settlement, determining the worth is the very first thing and it goes without saying.
Calculate today's value with this "present value calculator" for a series of future cash flow or periodical annuity payments. Fill-up the particulars by having a quick glance at your contract and know the present value monthly payments with ease. With very few details required you can compute the present value instantly and easily. The amount of the Present Values of the individual cash flows and the present value of a cash flow stream is utterly equal.
Estimating the present value of a structured settlement is easier said than done. In order to determine the overall worth, a handful number of variables come into play and it includes:
- The amount of the annuity settlement
- Current annuity market rates
- Frequency of annuity payments
- The portion of the annuity you wish to sell
- Amount paid in the past
- Fees and extra charges if any
- Payment duration
- Specific buyer guidelines
- The insurance company
Let us have a look at solving the present value of lump sums and solving for the number of periods and the interest rate.
Present Value of Lump Sums- Don't be confused when solving for the net present value of a lump sum because it is almost similar to solving for the future value. Unless the interest rate is high, the present value will be not as much of the future worth.
Solving present value, for the number of periods and interest rate- Based on the personal injury, sometimes you will know how much money you need to have at the undetermined future time period, but it is not possible all the time. Upon knowing the interest rate, it is possible to solve for the amount of time that it will take for the present value to mature to the future value by solving for N. As with interest rate, it is quite common. Perhaps you have lately sold an investment and would like to be acquainted with what your compound average annual rate of return was. Otherwise, maybe you are planning on making an investment and you would like to know what returns you need to be paid to achieve a certain future value. There are quite a few Present value calculators online that will help you figure out the amount, but be sure to have the right one that gives you accurate results.
Note- Understand that present value calculator is intended for general information only, simply an estimate on average and the exact data may differ. It is imperative to note that it does not take into account any personal or economic factors that may be related to your decision-making. Before using any calculator app or any other software read through and thoroughly understand the directions because one incorrect input means an incorrect answer. This incorrect answer will have a significant financial consequence.