You estimate that you can save $3,300 by selling your home yourself rather than using a real estate agent. What would be the future value of that amount if invested for six years at 2 percent? (Round FV factor to 3 decimal places and final answer to 2 decimal places)

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A:

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Present Value

Present value (PV) is defined as the current or present value of all future sums of cash flow or money at a specified rate of return. This rate of return is known as the discounted rate, which is essentially the interest rate, discounted over some time. The expected cash flows are discounted at a discount rate to compute the present value. The higher the discount rate, the higher the future value (FV), but the lower the present value.