what is the relationship between present value and future value 
present value and future value indicate the value of an investment looking forward or looking back the two concepts are directly related as the future value of a series of cash flows also has a present value for example a present value of 1 000 today may be equal to the future value of 1 200 today most often investors and analysts will know one value and try to solve for the other for instance if you buy a stock today for 100 that awards a 2 dividend each year you can calculate the future value of that stock alternatively if you want to have 10 000 of future value on hand for a down payment for a car next year you can solve for the present value the bottom linean annuity is a series of payments made over a period of time often for the same amount each period investors can determine the future value of their annuity by considering the annuity amount projected rate of return and number of periods there are also implications as to whether the annuity payments are made at the beginning or at the end of a period 