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What variables are required to calculate the present value of a future amount?
The future amount itself and a discount rate.
Calculate the future value of 150 if invested for three years at a 9 percent interest rate?
Value = 150*(1.09)3 = 150*1.295 = 194.25
Why present values are dependent upon interest rates?
Interest rates are also known as discount rates because in order to calculate the present value of a future amount, the future amount must be discounted back to the present
What is future value of 1 calculated at 8 percent in 18 periods?
It depends on the period. -- If the period is 1 year, the future value is 3.996 . -- If the period is 6 months, the future value is 2.026 . -- If the period is 3 months, the future value is 1.428 . -- If the period is 2 months, the future value is 1.269 . -- If the period is 1 month, the future value is 1.196 . These are compounded values. If interest is simple, then the value after 18 years is 2.44 .
How do you find future value of share if you have present of it?
F = Future value P = Present Value i = Intrest Rate n = no. of years Therefore, the formula for future value of present amount :- F= P (1+i)n
