Understand Present Value Versus Future Value

In this article, we will continue the financial investing series with the discussion of financial market structures known Present value and future value in macroeconomics.

The concept of present value versus future value is like the concept that a dollar today is worth more than a dollar. In fact, a dollar invested today earning interest will grow in value when the interest is paid and if the dollar plus interest is automatically reinvested for a further period of time, new interest will be earned on both the dollar of original investment and on the interest already earned. As this is repeated over a period of time, we call the result of compounding interest. It is possible to determine the future value of money by using

1. Financial tables.

a) Present value represents the original investment that we have in hand today.
b) Future value represents what that investment will grow to when interest is earned on a sequential renewal of investment, where the original investment plus all interest earned, keeps being reinvested for subsequent periods until maturity.

Here is the formula

FV = PV (1+I) where
FV is future value
PV is present value
I is annual interest rate
n is number of compounding periods

2. Present value of a single sum
In order to determine the present value, we must take the final sum and discount it by the interest factor working backwards from our known single sum. Here is a formula:
PV= FV/ (1+I)
The definitions for PV, FV, I, n are the same as 1. above.

3. Present value and the amount of the annuity payment of an annuity
There are two types of annuities
*Deferred Annuity:
Receipts on payments are made at the end of the period.
*Annuity Due:
Receipts or payments occur at the beginning of the period.
Future value of an annuity helps to calculate how much money needs to be invested today, in order to receive a certain payment in the future.

a) The present value of an annuity is calculated by the formula below
PV = (PMT/i) ยท [1 - (1 / (1 + i)n)]
PV= Present value
PMT= The amount of the annuity payment
i =The annual rate of interest
n =The number of discounting periods

b) The amount of the annuity payment is calculated by this formula below
PV= Present value
PMT= The amount of the annuity payment
i =The annual rate of interest
n =The number of discounting periods

I hope this information will help. If you want more information of the above subject, you can find this series of articles at my home page:

Giving Presentations – Public Speaking Secrets in a Nutshell

A high level manager contacted me in a panic. He was upset that his supervisor had asked him to give an important presentation in three days. He needed help – fast.

Occasional speech-givers make many errors. Three that are very common are poor speech-writing, inadequate knowledge of the topic, and undeveloped presentation skills.

When writing a speech, think of it from the listener’s point of view. Try to get the listener to be involved immediately, whether by telling an appropriate joke or story, reciting a statistic, or asking a theoretical question.

Explain why the information is of value to the listener. Will it help them improve their bottom line, play a better game of golf, understand foreign policy so they can explain it to their neighbors, or make the community safer? Why should they listen to you?

Organize the material with just a few main points. Is it clearly organized and within the time frames permitted? Are there stories, charts, or other attention-grabbing methods used? Is it interesting?

End the speech with a brief review of the topic, and one of many closing techniques. One is a clear call to action, whether the desired action is sending an e-mail, going to a community event or something else.

Know your topic well, especially if you are presenting to others who also know your topic. Prepare with additional resources you can include if needed. Think about probable questions you may be asked, and know the answers. If absolutely necessary, tell the audience you do not know the answer, but will get back to the person if he leaves you contact information. (Very few people will provide this.) Sometimes you can refer him to a more knowledgeable source, as well.

Presentation skills are enhanced with considerable practice. To overcome “stage fright”, or at least reduce it, think of yourself as a teacher, not a “speaker”. You know something the audience does not, which is why you are up there giving this presentation.

Practice using a tape recorder or other device. Listen to yourself. Do you sound knowledgeable, enthusiastic and clear? Is your pronunciation easily understandable? Is your contact information on your hand-outs (if you have any)?

the audience will be watching you as well as listening. If you are using visual presentation materials, are they easy to read and understandable? Do you look enthusiastic or at least comfortable?

There is much more to giving presentations well. The tips above, however, will make your next presentation more polished and professional. You only have one chance to make a great first impression. Be ready!

Sales Training Ideas – Six Keys to a Powerful Sales Presentation

Six Keys to a Powerful Sales Presentation

1) Be interesting and to-the-point.

Your presentation needs to catch and keep the prospect’s attention and interest. Make it interactive. Ask the prospect questions and involve her in ways that make her an active member in the proposed solution. Use interesting examples and stories that mirror her situation and spell out how others have benefited from using you and your company in similar situations.

2) Deliver with energy, enthusiasm, and emotional logic.

You need to show energy, enthusiasm, and excitement for your product. At the same time, you don’t want to overwhelm the prospect withtoo much energy and excitement. If your prospect is a high-energy individual, match their energy level. If your prospect is more subdued, show energy and excitement that is one level above theirs.

In addition to showing energy and enthusiasm, you need to back your presentation up with logic. Remember: people buy on emotion and justify their decision on logic.

Bottom line on this point: Put life, energy, and enthusiasm in your voice, and make sure your sales presentation makes good logical sense.

3) Address the specific needs, desires, and concerns of the prospect, and speak to her hot buttons.

Each presentation will be different because each prospect has different needs, desires, and concerns. If you’ve done your work properly during previous calls, you understand what the prospect is looking for and you’ve uncovered some hot buttons. You will now educate the prospect on how your product or service fills her unique needs and desires. Show caring, understanding, and empathy for the prospect, and show that you are seriously interested in helping her out.

Make sure you focus on the benefits and what’s in it for the prospect. Features are fine, but you must articulate what those features mean to the prospect with regard to what is important to him or her.

4) Be clear, concise, and articulate.

Your sales presentation should be easy to understand, to the point, and it should be delivered in terms that the prospect will understand. You want to use as few words as possible while at the same time, using the most effective words possible. Also, no acronyms or other terms and phrases that the prospect may not be familiar with.

Finally, keep your initial presentation to a maximum of three solid points. If you overwhelm the prospect with more than three points, you will probably hear, “I want to think about it” and “send me some information.” If you have other legal items and disclosures that you have to cover, save those for the paperwork phase after the prospect has decided to buy.

5) Lead naturally to the close.

Your sales presentation should be designed in such a way that it walks the prospect smoothly through the presentation, addressing all needs and concerns, and flows right into the close. If your presentation is straight-forward, conversational, and covers all the bases, the close is simply the natural conclusion of the presentation.

6) Have a script.

While each presentation will be different based upon the individual prospect’s needs and desires, most of the pieces remain the same, you’ll simply use different ones and arrange them differently. Each feature and benefit, story, and piece of information you need to convey, must be well thought out, well prepared, written down, committed to memory, and most important, proven to work. Some people believe that having a written presentation is too unnatural-you may sound as though you are reading (if on the phone), or canned (if in person). The way to avoid this is by practicing, drilling, and rehearsing your presentation pieces to the point where you know them verbatim.

The goal of a script is to make sure you cover everything you need to cover in as few words as possible while at the same time, using the most effective words possible. Writing out each piece of your presentation and committing them to memory will ensure consistency throughout your presentation, it will also help identify any problems with your presentation.

Note: Don’t reinvent the wheel, get a presentation script from one of the top salespeople that you know works. You want their results, so use what they use.