Example: Present Value of an Investment

A lady wins a $10 million lottery. The money is to be paid out at the end of each year in $500,000 payments for 20 years. The current treasury bill rate of 6% is used as the discount rate. Here, the present value of her prize is computed.

import com.imsl.finance.*;
import java.text.NumberFormat;

public class pvEx1 {

    public static void main(String args[]) {
        double rate = 0.06;
        double pmt = 500000.;
        double fv = 0.;
        int nper = 20;
        int when = Finance.AT_END_OF_PERIOD;

        double pv = Finance.pv(rate, nper, pmt, fv, when);

        System.out.println("The present value of the $10 million prize is "
                + NumberFormat.getCurrencyInstance().format(pv));


The present value of the $10 million prize is ($5,734,960.61)
Link to Java source.