# Present Value and Future Value

`D00-F02-A03` · Financial Mathematics, Statistics, and Data Foundations → Financial Arithmetic, Time Value, and Returns · archetype `record-transform` · difficulty 1/5 · verification **verified**

Full page: https://docs.thefintechbuilder.com/foundations/financial-arithmetic-time-value-and-returns/present-future-value/
Agent skill: `npx skills add IslamBaraka90/Fintech-Algorithms-Library` — https://docs.thefintechbuilder.com/guides/agent-skill/

## Install and import

```bash
npm install fintech-algorithms
```

```ts
import { presentValueAndFutureValue } from "fintech-algorithms/foundations/financial-arithmetic-time-value-and-returns/present-future-value";
```

## Signature

```ts
presentValueAndFutureValue(input)
```

Moves money along the timeline in both directions at once: it compounds `principal` forward and discounts a supplied `futureValue` back, over the same number of periods at the same rate.

## Parameters

| Name | Type | Required | Notes |
| --- | --- | --- | --- |
| `input` | `D00Input` | yes | A plain object. Every F02 topic first reads `principal`, `rate` and `periods` and validates them before any per-topic branch runs. This topic then reads the input key `futureValue`, the amount to be discounted back to today, coerced with `Number`. |

## Returns

`{ futureValue: number; presentValue: number }`

The returned `futureValue` is `principal * (1 + rate) ** periods` and is computed from `principal`, not from the input key of the same name. `presentValue` is the input `futureValue` divided by `(1 + rate) ** periods`.

## Errors

- When input is not a plain object — throws TypeError
- When principal is negative, periods is negative, or rate is at or below -1 — throws RangeError

## Complexity

Time `O(1)`, space `O(1)`.

## Worked example

This is the worked example published in the article, replayed by the test suite on every run. The output cannot drift.

### Input

`input`:

```json
{
  "principal": 1000,
  "rate": 0.05,
  "periods": 3,
  "compoundsPerPeriod": 12,
  "futureValue": 1200,
  "cashFlows": [-1000, 400, 400, 400],
  "startValue": 100,
  "endValue": 110,
  "returns": [0.1, -0.05, 0.08],
  "frequency": 12,
  "periodicReturn": 0.01
}
```

### Call

```ts
presentValueAndFutureValue(input)
```

### Returns

object with 2 fields: futureValue, presentValue

```json
{
  "futureValue": 1157.6250000000002,
  "presentValue": 1036.6051182377712
}
```

## Verification and provenance

Tier: **verified** (via input-expected).

The worked example below is the figure published in this algorithm's article, replayed and asserted by the test suite on every build. The arithmetic cannot drift without the build failing.

Both tiers guarantee the signature. Full explanation: https://docs.thefintechbuilder.com/guides/verification/

Generated from the docs.json payload shipped inside fintech-algorithms@0.13.0.
The signature and parameter list are checked against the compiled implementation at build time,
so a description that contradicts the code fails the build rather than reaching this file.

## Links

- Article (how it works, step by step): https://thefintechbuilder.com/foundations/financial-arithmetic-time-value-and-returns/present-future-value/
- Implementation source: https://github.com/IslamBaraka90/Fintech-Algorithms-Library/blob/main/src/foundations/financial-arithmetic-time-value-and-returns/present-future-value/impl.ts
- Package on npm: https://www.npmjs.com/package/fintech-algorithms
- Domain index for agents: https://docs.thefintechbuilder.com/foundations/llms.txt