The basic formula for valuing a stream of amounts that a company will receive, or pay, in the future is (where I = an interest or discount rate and t indicates the time period):

The basic formula for valuing a stream of amounts that a company will receive, or pay, in the future is (where I = an interest or discount rate and t indicates the time period): 5 amount Value = IM (1 +i ) O amount Value = > 1=1 (1 +i ) O amount Value = > 1=1 (1 +i) O 5 amount Value = ( 1 + i )