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What is the relationship between present and future value?
The relationship is that present value is the current value of future cash flows discounted at the appropriate discount rate. Future values are the amount a present value investment is worth after one or more periods. We learn everything we can in the present so we have some of the answers for the future and what we don't know we ask the pros about. The difference between the two is contributed by time. The value of something (an asset) may typically increase over a period of time. $100 that you give me today is not the same as $100 you give a year later. There is an interest (or return) that accrues when you pay me $100 a year later. The future value after n years of an amount P where R is the rate of interest (in percentage) is calculated as P(1+R/100)**n : using compound interest. If R =50 (that is 50% rate of return, I know it is high) and n = 2 years, the future value of P is P*1.5*1.5=2.25P where is today's value. The Present value can be calculated from the future value as P = F/( (1+R/100)**n ) It is necessary to measure the value of an amount that is allowed to grow at a given interest over a period. This is how the future value is determined.
What is the value of 10000 with a 5 percent interest over 30 years?
see this similar question, problem is done the same way.What_is_the_value_of_10000_with_a_3_percent_interest_over_30_years
What is the interest on R528 at 7 percent simple interest over 2 years?
7% simple annual interest over 2 years = 14% total interest.14% of R528 = R73.92 .
What is the compound interest of 4000 at 4 percent over 30 years?
The interest will be 8973.59 approx.
What is the value of 10000 with a 3 percent interest over 30 years?
Compounding of simple interest can be used by the following formula:P = P0 * (i+1)nwhere i is the ineterest rate; n the number of years; P0 initial principleP = 10,000 * (0.03+1)30= 10,000*(2.427262)= $24,272.62
