Section 2
Future Value, Single Amount
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4 concepts
Multi-Period Investment
Multi-period investments take place over more than one period (usually multiple years). They can either accrue simple or compound interest.
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.
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.
Single-Period Investment
Since the number of periods (n or t) is one, FV=PV(1+i), where i is the interest rate.