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Future Value


Value of current cash flow in Future – Compounding

 

Amount to which investment grows after one or more time period FV = PV*(1+1/Y)N


 

Q: If interest rate of 8%, what will be the value of sum of $1,000 invested today will grow in 5 years?

Answer: FV=PV*(1+r)n
  =1,000*(1.08)5
  = $1,469.3

 





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