# How to compute the present value of a liability

There is a liability which will owe x dollars per year in n years with interest rate r (annual compounding). Is the present value of this liability given by:

sum(x/(1+r)^i)


or

sum(x(1+r)^i)


In other words, are there differences in calculating present value of a bond and of a liability or loan?

Thanks!

• MathJax tags don't work in this forum (the support is forum-by-forum). – D Stanley Apr 6 '18 at 18:20