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In our example the future value of 1000 is 1331 after 3 years 10 interest rate compounding annually.
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An example of this would be a company that pays out dividends at the end of a fiscal quarter where its earnings allowed them to pay proceeds to shareholders.
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Like many financial tools future value is based on the time value of money concept which states that a dollar today is worth more than a dollar at some time in the future.
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Future Value Present Value 1 Interest Rate x Number of Years Lets say Bob invests 1000 for five years with an interest rate of 10.
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Example of Future Value Calculation in Excel December 24 2014 Future value tells you how much money you could have in the future if you invested a certain amount of money today with a certain interest rate.
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Future value of an single sum of money is the amount that will accumulate at the end of n periods if the a sum of money at time 0 grows at an interest rate i.
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R 5100 005 decimal.
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Future value of an single sum of money is the amount that will accumulate at the end of n periods if the a sum of money at time 0 grows at an interest rate i.
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This process of calculation is known as compounding and the sum arrived at after compounding of initial amount is known as Future Value.
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This process of calculation is known as compounding and the sum arrived at after compounding of initial amount is known as Future Value.
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Future value of an single sum of money is the amount that will accumulate at the end of n periods if the a sum of money at time 0 grows at an interest rate i.
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Future value FV is a measure of how much a series of regular payments will be worth at some point in the future given a specified interest rate.
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A good example for this kind of calculation is a savings account because the future value of it tells how much will be in the account at a given point in the future.
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We will use easy to follow examples and calculate the present and future value of both sums of money and annuities.