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What variables are used in solving a time value of money problem with no periodic​ payments?...

What variables are used in solving a time value of money problem with no periodic​ payments? Which of these variables equals zero when solving a somple​ present- or​ future-value problem with no periodic​ payments? Why?

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Answer #1

Every time value of money problem has five variables:

  1. Present value (PV)
  2. Future value (FV)
  3. number of periods (N)
  4. Interest rate (i)
  5. Payment amount (PMT)

When solving a simple present vale problem or future value problem with no periodic payments, "Payment amount (PMT)" is zero.

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