# What is the appropriate way to get FV and PV

Hi, I am currently studying the Derivatives section and am starting to get confused. In the CFAI textbook, for a given interest rate r, they will find the FV and PV using different methods.
For example:
When calculating the value of a forward contract, to find PV[Ft - F0], they will discount using an exponential like this: /(1+r)^t/T.
While when valuing Present Value factors for swaps, they will discount like this: /(1+ r * (NAD/NTD)).

I know both methods will end up giving similar answers, but I would gladly appreciate some help on when to use an exponential vs. when to directly multiply the interest rate by (t/T) and then add it to 1. Same goes for finding the FV.

Thank you

Swaps have generally been based on LIBOR, which is quoted as a nominal rate. (Well, not any more, but whatever replaced it is probably nominal as well.) No compounding.

Bonds are usually quoted using BEY, which is also a nominal rate. No compounding.

Most other investments are quoted using effective rates. These can be compounded.