Present Value Tables:
Present value tables are a simple technique used to calculate the present value of a cash flow or stream of cash flows. There are two tables, Table A and Table B. They are described below:
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Table A:
Table A is used when we want to calculate the present value a single cash flow in the future. For example, if I was to say; I will give you $900 in two years time; this formula would be used to calculate the present value.
Table B:
Table B is used for annuities. An annuity is a stream of cash flows in the future of equal payments where each payment is an equal length apart. For example we would use table B to calculate the present value of 1 payment every year for five years.
How to use present value tables:
Along the horizontal axis is the discount rate and along the vertical axis is the number of periods. Find the discount rate and the number of periods in the particular question. On the table find the point at which the two variable meet. This is your PV factor. Multiply this by the future cash flow (table A) or the fixed stream of payments (annuity- table B)