Engineering

How to Calculate and Solve for Present Worth | Gradient Series | Economic Equivalence

Last Updated on August 6, 2020

The image above represents present worth.

To compute for present worth, three essential parameters are needed and these parameters are Gradient Amount (G), Interest Rate (i) and Number of Years (N).

The formula for calculating present worth:

P = G[((1 + i)N) – iN – 1] / [i²((1 + i)N)]

Where:

G = Gradient Amount
P = Present Amount or Worth
i = Interest Rate
N – Number of Years

Let’s solve an example;
Find the present worth when the gradient amount is 22, the interest rate is 0.2 and the number of years is 2.

This implies that;

G = Gradient Amount = 22
i = Interest Rate = 0.2
N – Number of Years = 2

P = G[((1 + i)N) – iN – 1] / [i²((1 + i)N)]
P = 22[((1 + 0.2)2) – 0.2(2) – 1] / [0.2²((1 + 0.2)2)]
P = 22[((1.2)2) – 0.4 – 1] / [0.0400000000000001((1.2)2)]
P = 22[1.44 – 0.4 – 1] / [0.04000000000000001 x 1.44]
P = 22[0.040000000000000036] / [0.05760000000000001]
P = 22 x 0.6944444444444449
P = 15.27

Therefore, the present worth is ₦15.27.

Nickzom Calculator – The Calculator Encyclopedia is capable of calculating the present worth.

To get the answer and workings of the present worth using the Nickzom Calculator – The Calculator Encyclopedia. First, you need to obtain the app.

You can get this app via any of these means:

Web – https://www.nickzom.org/calculator-plus

To get access to the professional version via web, you need to register and subscribe for NGN 1,500 per annum to have utter access to all functionalities.
You can also try the demo version via https://www.nickzom.org/calculator

Android (Paid) – https://play.google.com/store/apps/details?id=org.nickzom.nickzomcalculator
Android (Free) – https://play.google.com/store/apps/details?id=com.nickzom.nickzomcalculator
Apple (Paid) – https://itunes.apple.com/us/app/nickzom-calculator/id1331162702?mt=8
Once, you have obtained the calculator encyclopedia app, proceed to the Calculator Map, then click on Economics under Engineering.

Now, Click on Economic Equivalence under Economics

Now, Click on Present Worth under Economic Equivalence

The screenshot below displays the page or activity to enter your values, to get the answer for the present worth according to the respective parameters which are the Gradient Amount (G), Interest Rate (i) and Number of Years (N).

Now, enter the values appropriately and accordingly for the parameters as required by the Gradient Amount (G) is 22, Interest Rate (i) is 0.2 and Number of Years (N) is 2.

Finally, Click on Calculate


As you can see from the screenshot above, Nickzom Calculator– The Calculator Encyclopedia solves for the present worth and presents the formula, workings and steps too.

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