BUSINESS ADMINISTRATION
FINANCIAL MANAGEMENT
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Compounding
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Inflation
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Discounting
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Deflation
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Detailed explanation-1: -Future Value Interest Factor, abbreviated as FVIF, is a financial ratio used to determine the future value of an amount invested today. It is based on the time value of the money principle and calculates the compound returns required for a sum of money to reach a given level at a specific point in the future.
Detailed explanation-2: -Compound interest, can be calculated using the formula FV = P*(1+R/N)^(N*T), where FV is the future value of the loan or investment, P is the initial principal amount, R is the annual interest rate, N represents the number of times interest is compounded per year, and T represents time in years.
Detailed explanation-3: -Future Value (FV) = PV × (1 + r) ^ n Where: PV = Present Value. r = Interest Rate (%) n = Number of Compounding Periods.
Detailed explanation-4: -The present value interest factor (PVIF) is the reciprocal of the future value interest factor (FVIF). 3. If the discount rate decreases, the present value of a given future amount decreases.