MANAGEMENT

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: -In its most basic form, the formula for future value (FV) is FV= PV*(1+i)^n, where “PV” equals the present value, “i” represents the interest rate and “n” represents the number of time periods.

Detailed explanation-3: -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.

Detailed explanation-4: -Future value is the value of an asset at a specific date. It measures the nominal future sum of money that a given sum of money is “worth” at a specified time in the future assuming a certain interest rate, or more generally, rate of return; it is the present value multiplied by the accumulation function.

Detailed explanation-5: -Present value is the sum of money that must be invested in order to achieve a specific future goal. Future value is the dollar amount that will accrue over time when that sum is invested. The present value is the amount you must invest in order to realize the future value.