What is
Introduction:
The future value is the value of single present amount accumulated at a rate of interest before a given future date. In other words, a single sum of money’s future value is the amount that will compounded at the end of “n” periods if a sum of money at time “0” rises at interest rate. The value of the future is the sum of present value and the cumulative interest. The formula for future value is,
Answer:
Future value interest factor (FVIF):
It is also referred to as future value factor. It is an aspect that helps to measure the future value of cash flows to be paid in the future at a specified stage. A single cash flow or a sequence of cash flows in case of annuities may be the future cash flows.
This factor allows one to calculate the impact of future compounding of a single cash flows or multiple cash flows per (that occur at normal time intervals) per dollar on its present value is based on the principle of money’s time worth.
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