Time Value of Money – FV = PV (1 + r)t Assume you deposit $1,000 today...
- Time Value of Money – FV = PV (1 + r)t
Assume you deposit $1,000 today in an account that pays 8 percent interest. How much will you have in 4 years? Answer: ___________________ (explain how you obtained the number)
Homework Answers
We use the formula:
FV=PV(1+r)^t
where
FV=future value
PV=present value
r=rate of interest
t=time period.
Hence
A=$1000*(1.08)^4
=$1000*1.36048896
=$1360.48896
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Time Value of Money – FV = PV (1 +
r)t
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