What is the future value of 1000 dollars received

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Reference no: EM132466845

Future Value (FV)

Present Value (PV)

FV = PV (1 + r)n

PV = FV / (1 + r)n

What do you prefer--1000 dollars today or 1000 dollars one year from now? Why?

If the interest rate is 5 percent (r = 0.05), what is the future value of 1000 dollars received now in one year? Two years? Three years? Why?

Complete these same calculations for the situation when the interest rate is 10 percent (r = 0.1). Explain why these numbers are different than the one when r = 0.05.

If the interest rate is 5 percent (r = 0.05), what is the present value of 1000 dollars received one year from now? Two years? Three years? Why?

Complete these same calculations for the situation when the interest rate is 10 percent (r = 0.1). Explain why these numbers are different than the one when r = 0.05.

Reference no: EM132466845

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