future value(FV) of the money scenario look like

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future value(FV) of the money scenario look like


bobs invest $5000 today in a five year CD ( certificate of deposit) the cd pays 4% interst [per year]? how much will bobs recive when CD MATURES? You want to know the future value value ,so you would be moving money forward in time . an investor wants to buy a piece of art that she think can be sold in five year for $25,000.if the investor wants to earn a 10% returen that present value (PV) she is going to pay. THE INVESTOR IS CONSIDERING THE PURCHASE TODAY SO THE CALULATION MUST BE A PRESENT VALUE(PV) CALCULATION.

 SCENARIOS DECIDE WHETHER WE NEED TO CALCULATE A PRESENT VALUE OR A FUTURE VALUE.A single 100000loan repayment will be due in 10 years. if a business want to set aside money to satisfy the loan ,how much should be deposited into a saving account eachj year if the bank pays 2% interst? PRESENT VALUE WE know that 100000 and we need to move to move that money backwardin time. suppose you deposit $10,000 into an account earning 4%intrest what will be the account value in sevent years this is a good example of the future value.


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