Calculate your present value

Reference no: EM133263929

Question: The concept of Time Value Money (TVM) is that a dollar today will buy more today (or be of greater value) than a dollar next year. Therefore, to determine if someone should make an investment on a renewable energy for their house, they will want to calculate what the present value (PV)of the investment is today, to make sure it will be more than the actual investment. For example, if you are looking to put in a wind turbine in your backyard and the turbine costs $5,000, with an annual savings of $500 over 5 years, and with an interest rate of 3 %, which of the following TVM formulas would you want to use to calculate your PV:

- PV = FV - (i x PV)

- PV = FV / (1 + i)

- PV = (A / I) [1-1/(1 + i) ^n]

- PV = FV / (1 + i)^n

Reference no: EM133263929

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