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Boundless Finance
The Time Value of Money
Finance Textbooks Boundless Finance The Time Value of Money
Finance Textbooks Boundless Finance
Finance Textbooks
Finance

Section 2

Future Value, Single Amount

Book Version 3
By Boundless
Boundless Finance
Finance
by Boundless
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4 concepts
Single-Period Investment

Since the number of periods (n or t) is one, FV=PV(1+i), where i is the interest rate.

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Multi-Period Investment

Multi-period investments take place over more than one period (usually multiple years). They can either accrue simple or compound interest.

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Calculating Future Value

The Future Value can be calculated by knowing the present value, interest rate, and number of periods, and plugging them into an equation.

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Approaches to Calculating Future Value

Calculating FV is a matter of identifying PV, i (or r), and t (or n), and then plugging them into the compound or simple interest formula.

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