Fn = P (1 + r )n where F n = accumulation or future value P = one-time investment today r = interest rate per period n = number of periods from today
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The present value of future cash flows is inversely related to the interest rate.
Discount factor is the factor determining future cash flow, but multiplying the cash flow to obtain present value. Discount rate is used in calculations to equal the cost of capital.
Present value annuity factor calculates the current value of future cash flows. The present value factor is used to describe only the current cash flows.
cash reserve ratio
The face value is what your beneficiaries will collect. The cash value is the excess of your premium payments over the cost of the insurance. Click here for more about life insurance cash value.