BUSINESS ADMINISTRATION
FINANCIAL MANAGEMENT
|
Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
|
|
|
The principal is $13, 000, the time period is 5 years, the future value is $18, 233.17, and the interest rate is 7%.
|
|
|
The future value is $13, 000, the time period is 5 years, the principal is $18, 233.17, and the interest rate is 7%.
|
|
|
The principal is $13, 000, the time period is 5 years, the future value is $18, 333.17, and the interest rate is 7%.
|
|
|
The principal is $13, 000, the time period is 7 years, the future value is $18, 233.17, and the interest rate is 5%.
|
Detailed explanation-1: -The future value of $500 one year from today if the interest rate is 6 percent is $530.
Detailed explanation-2: -The future value formula is FV=PV(1+i)n, where the present value PV increases for each period into the future by a factor of 1 + i. The future value calculator uses multiple variables in the FV calculation: The present value sum.
Detailed explanation-3: -FV is an important financial concept because it helps investors determine the value of the investment during a set number of years. Inflation, rate of return, or economic events, can change the value of money over time.
Detailed explanation-4: -Compound interest is the term we use to refer to interest income earned in subsequent periods that is based on interest income earned in prior periods. To put it simply, compound interest refers to interest that is earned on interest.