9. Calculating the Number of Periods You're trying to save to buy a new $175,000 Ferrari. You have $35,000 today that can be invested at your bank. The bank pays 2.9 percent annual interest on its accounts. How long will it be before you have enough to buy the car? LO 4
Future value refers to the estimated value of an investment or an amount of money at a specified future time, taking into account the impact of interest or investment returns. It represents the total value that an investment will accumulate over time when compounded with a given interest rate. The number of periods, also known as the time period or the term, represents the length of time over which an investment grows or a loan is repaid. It is a crucial factor in determining the future value or the total repayment amount. It can be measured in years, months, quarters, or any other unit of time depending on the context. It is used in various financial calculations to determine the growth or repayment schedule.
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