Technical Note: Calculating the Present Value of an Ordinary Annuity

Marshall, Kevin S. and Mariam Margaryan. 2007. “Technical Note: Calculating the Present Value of an Ordinary Annuity.”  The Earnings Analyst  9: 90-96.


Forensic economic analysis involves the estimation of past and future value. In the realm of a personal injury lawsuit, such estimation typically focuses on the loss of past and future streams of income. The ultimate focal point of any settlement or judgment is the present value of alleged future streams of income allegedly lost due to a wrongful intervention triggered by an accused defendant. This technical note provides a brief review of the conventionally accepted methodology referenced in most economic and finance textbooks, as well as utilized by analysts when estimating the present value of a future stream of income.


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