Purchase Solution

Difference Between the PV and FV of an investment

Not what you're looking for?

Ask Custom Question

You just received $225,000 from an insurance settlement. You have decided to set this money aside and invest it for your retirement. Currently, your goal is to retire 25 years from today. How much more will you have in your account on the day you retire if you can earn an average return of 10.5 percent rather than just 8 percent?

Purchase this Solution
Solution Summary

This solution calculates the difference between the present value and future value, based on the scenario given.

Solution Preview

To solve this, you need to calculate the difference between the two ...

Purchase this Solution
Free BrainMass Quizzes
Learning Lean

This quiz will help you understand the basic concepts of Lean.

Business Ethics Awareness Strategy

This quiz is designed to assess your current ability for determining the characteristics of ethical behavior. It is essential that leaders, managers, and employees are able to distinguish between positive and negative ethical behavior. The quicker you assess a person's ethical tendency, the awareness empowers you to develop a strategy on how to interact with them.

Academic Reading and Writing: Critical Thinking

Importance of Critical Thinking

Transformational Leadership

This quiz covers the topic of transformational leadership. Specifically, this quiz covers the theories proposed by James MacGregor Burns and Bernard Bass. Students familiar with transformational leadership should easily be able to answer the questions detailed below.

Balance Sheet

The Fundamental Classified Balance Sheet. What to know to make it easy.

View More Free Quizzes
Related BrainMass Solutions

  • Financial Economics - Compounding and Present Value

    Interest rate = 3% Number of years = 5 We can compute the present value of both offers and find the difference between them: a) Annual payment = 60000 Interest = 3% N = 5 FV = 0 By a financial calculator, or EXCEL command (=-PV(3%,5,60000,0)),

  • Radicals, Polynomials, and Nomenclature

    t = the duration of an investment program, in years. FV = future value ; that is, the money you expect to have after n years. i = interest rate, per year.

  • Finite Mathematics (Future Value - Present Value)

    493323 Finite Mathematics (Future Value - Present Value) Can you help me with the following questions: - What is the difference between the accumulated amount (future value) and the present value of an investment? Please give examples of each.

  • You will receive $5,000 three years from now. The discount r

    What is the value of your investment two years from now? FV = 5,000; rate = 8%; N = 1 years; PV =? PV = FV x PVIF8%, 1 year = 5,000 x 0.926 = $4,630 b. What is the value of your investment one year from now?

  • Time Value of Money Concepts

    If you plan on leaving the money in the account for 10 years, what will be the difference between the Optimum and Prime account balances at the end of the tenth year? 4.

  • NPV of an investment with two different annuities

    310699 NPV of an Investment with Two Different Annuities How can I tell when to do a PV calculation and when to do a FV calculation? How do you calculate NPV of an investment with two different annuities?

  • Calculating the present value of an investment

    The formula for the future value of an investment is: FV = PV(1 + i)^t where i = interest rate (expressed as a ratio) and t = time until maturity.

  • Present and Future Value Relationship

    Calculations involved: FV = PV(1+r)^n r is the annual interest rate and n is the number of periods PV = FV(1/1+r)^n PV and FV are important concepts in personal life.

  • Bond reinvestment of coupons; Yield to call; IRR for a 20 ye

    426118 Bond reinvestment of coupons; Yield to call; IRR for a 20 year bond held for 5 years a- What is the total future value dollar difference between reinvestment of coupons at the YTM of a bond selling at 98-5/8 with a coupon of 7% (paid semiannually

View More Related Solutions