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Future Value of an investment

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I'm having a hard time understanding future value. Can I please get a simple answer for the following?

Discuss the positive and negative effects of the future value of an investment, for a duration of a) a single period and b) a double period. Discuss the good effects and ill effects that a future value of an investment will have if invested for a single period and a double period.

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Solution Summary

The future value of an investment is examined. The positive and negative effects of the future value is determined.

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Answer:
If we look at the positive effect of the future value we can find that in single period the future value of the investment would be:

Here,
X=Invested amount and
r=interest rate
Here the positive is that an investor can find out the right investment opportunity by calculating the future value of the ...

Solution provided by:
Jayant Kumar, MBA
Education
  • MBA, Indian Institute of Finance
  • Bsc, Madras University
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