Present and Future Value Relationship
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Please explain and support your reactions to the following questions:
•What is the relationship between Present Value and Future Value?
•What are the calculations involved with PV and FV?
•How can you apply these concepts to a personal or business situation you are familiar with - please explain and support with terms and concepts?
Please Cite and List all references used.
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Solution Summary
The solution provides an overview of present value and future value. The calculations involved with PV and FV are provided. How the expert applies these concepts to a personal or business situation is determined. References are provided to aid in the understanding of present and future values.
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The future value gives the value that a particular sum of money has in future, considering certain interest rate or rate of return. On the other hand present value is the value on a given date of payment. PV and FV have an inverse relationship, i.e. when increases other decreases and vice versa. PV can be found from FV by discounting.
Calculations ...
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