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Time in Relation to Future and Present Values

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1. When the number of periods grows, how are present and future values impacted? Explain with an example in Excel.

2. Solve for the future value given these assumptions:
Present Value Years Interest rate Future value
$2,250 11 10%
8,752 7 8
76,355 14 17
183,796 8 7.

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Solution Summary

Your tutorial shows you, using the function in Excel, the computation for FV. Then, to illustrate the impact on PV and FV on the length of time, two schedules are created, one for PV and one for FV. This table shows how it changes from one period to 13 periods with an instructional comment explaining why.

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Your tutorial shows you, using the function in Excel, the computation for FV. ...

Solution provided by:
Carol Sargent, PhD
Education
  • BSc, University of Virginia
  • MSc, University of Virginia
  • PhD, Georgia State University
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