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4 cards from this section. Quick, good the night before a test.
What is the formula for calculating Future Value?
Think about how interest applies over time.
Define Present Value.
Consider its context in time.
What does the time value of money imply?
Think about investing vs. waiting.
Is the future value of money higher when interest rates increase?
Consider how investments perform over time.
A company needs 15,00,000 for equipment replacement in 10 years. If they can earn 8% on their savings, how much do they need to deposit today?
Apply the present value formula you learned.
Calculate the future value of a monthly deposit of 5,000 for 12 years at an interest rate of 5%. What do you expect to have saved?
Don’t forget to account for each monthly deposit's time value!
5 more questions in this section. Enroll free to practise them all.
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