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One of the four major time value of money terms; the amount to which an individual cash flow or series of cash payments or receipts will grow over a period of time when earning interest at a given rate of interest.

Respuesta :

maranathaoye

Answer:

Future value

Explanation:

Future value is the value an assets as currently based on the assumed rate of its growth or increase.

Determining the future value of money or an investment helps one to make calculated decisions on what to get from the purchasing power of such money or how much the investment will be worth in the future.

Future value is calculated using

FVi=PV (1+I)n

Where

FVi is the value at the end of a particular period.

PV is price value.

I is the interest rate.

n is the number of compounding periods.

ProfChris1

Answer:

FUTURE VALUE

Explanation:

Future Value simply refers to the potential value of money at a specific point in time in future.

Based on an assumed growth rate, future value is the value of a current asset at some point in the future.

Formula For Future Value

FV = PV (1+I)^n

where

FV = Future Value

PV = Present Value

I = Interest rate

n= number of compounding periods.

Some benefits of Future Value are:

1. Helps investors to determine value of investment in a set number of years.

2. Investors enjoy security of money.

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