## Present value:

The present value of a future payment gives an idea of its worth today. Future payments can be for a fixed period of time, called annuity or for an infinite time period, called perpetuity.

Present Value of $690 annuity payment over five years is$177.39

Annuity factor = ( 1 - (1 / (1 + r)^n)) / r (where r is the interest rate per year and n is the number of years)
= ( 1 - (1 / (1 + 0.09)^5)) / 0.09
= 0.25709

Present Value of $690 annuity payment over five years =$690 * 0.25709
= \$177.39