The meaning of future value of an investment. Introduction: The time value of money implies that the cash in hand at present has a higher value than the cash receipt promised in the future. In other words, time value of money states that the money at present is worth more than the money at a future date. The interest or return earned on the investment will help in offsetting the value lost due to time value of money.

Question

Want to see more full solutions like this?

Answer 1

Question

Chapter 4, Problem 4.1ACQ

Summary Introduction

To discuss: The meaning of future value of an investment.

Introduction:

The time value of money implies that the cash in hand at present has a higher value than the cash receipt promised in the future. In other words, time value of money states that the money at present is worth more than the money at a future date. The interest or return earned on the investment will help in offsetting the value lost due to time value of money.

Expert Solution & Answer

Explanation of Solution

The future value of money refers to the amount of dollars that an investment grows over a definite period at a particular rate of interest rate. In other words, it refers to the future value of present cash investments.

Example:

If Person A is invests $100 in a fixed deposit account at 10 percent interest, then the value of $100 after one year (future value) will be $110($100×1.10).

Conclusion

The future value of money refers to the amount of dollars that an investment grows over a definite period at a given rate of interest rate.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Students have asked these similar questions

Dividend problem . Solve plz

Finance prob.

Need abs

Answer 2

Question

Chapter 4, Problem 4.1ACQ

Summary Introduction

To discuss: The meaning of future value of an investment.

Introduction:

The time value of money implies that the cash in hand at present has a higher value than the cash receipt promised in the future. In other words, time value of money states that the money at present is worth more than the money at a future date. The interest or return earned on the investment will help in offsetting the value lost due to time value of money.

Expert Solution & Answer

Explanation of Solution

The future value of money refers to the amount of dollars that an investment grows over a definite period at a particular rate of interest rate. In other words, it refers to the future value of present cash investments.

Example:

If Person A is invests $100 in a fixed deposit account at 10 percent interest, then the value of $100 after one year (future value) will be $110($100×1.10).

Conclusion

The future value of money refers to the amount of dollars that an investment grows over a definite period at a given rate of interest rate.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 3

Question

Chapter 4, Problem 4.1ACQ

Summary Introduction

To discuss: The meaning of future value of an investment.

Introduction:

The time value of money implies that the cash in hand at present has a higher value than the cash receipt promised in the future. In other words, time value of money states that the money at present is worth more than the money at a future date. The interest or return earned on the investment will help in offsetting the value lost due to time value of money.

Expert Solution & Answer

Explanation of Solution

The future value of money refers to the amount of dollars that an investment grows over a definite period at a particular rate of interest rate. In other words, it refers to the future value of present cash investments.

Example:

If Person A is invests $100 in a fixed deposit account at 10 percent interest, then the value of $100 after one year (future value) will be $110($100×1.10).

Conclusion

The future value of money refers to the amount of dollars that an investment grows over a definite period at a given rate of interest rate.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 4

Question

Chapter 4, Problem 4.1ACQ

Summary Introduction

To discuss: The meaning of future value of an investment.

Introduction:

The time value of money implies that the cash in hand at present has a higher value than the cash receipt promised in the future. In other words, time value of money states that the money at present is worth more than the money at a future date. The interest or return earned on the investment will help in offsetting the value lost due to time value of money.

Expert Solution & Answer

Explanation of Solution

The future value of money refers to the amount of dollars that an investment grows over a definite period at a particular rate of interest rate. In other words, it refers to the future value of present cash investments.

Example:

If Person A is invests $100 in a fixed deposit account at 10 percent interest, then the value of $100 after one year (future value) will be $110($100×1.10).

Conclusion

The future value of money refers to the amount of dollars that an investment grows over a definite period at a given rate of interest rate.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 5

Chapter 4, Problem 4.1ACQ

Summary Introduction

To discuss: The meaning of future value of an investment.

Introduction:

The time value of money implies that the cash in hand at present has a higher value than the cash receipt promised in the future. In other words, time value of money states that the money at present is worth more than the money at a future date. The interest or return earned on the investment will help in offsetting the value lost due to time value of money.

Expert Solution & Answer

Explanation of Solution

The future value of money refers to the amount of dollars that an investment grows over a definite period at a particular rate of interest rate. In other words, it refers to the future value of present cash investments.

Example:

If Person A is invests $100 in a fixed deposit account at 10 percent interest, then the value of $100 after one year (future value) will be $110($100×1.10).

Conclusion

The future value of money refers to the amount of dollars that an investment grows over a definite period at a given rate of interest rate.

Answer 6

Chapter 4, Problem 4.1ACQ

Summary Introduction

To discuss: The meaning of future value of an investment.

Introduction:

The time value of money implies that the cash in hand at present has a higher value than the cash receipt promised in the future. In other words, time value of money states that the money at present is worth more than the money at a future date. The interest or return earned on the investment will help in offsetting the value lost due to time value of money.

Expert Solution & Answer

Explanation of Solution

The future value of money refers to the amount of dollars that an investment grows over a definite period at a particular rate of interest rate. In other words, it refers to the future value of present cash investments.

Example:

If Person A is invests $100 in a fixed deposit account at 10 percent interest, then the value of $100 after one year (future value) will be $110($100×1.10).

Conclusion

The future value of money refers to the amount of dollars that an investment grows over a definite period at a given rate of interest rate.

Answer 7

Chapter 4, Problem 4.1ACQ

Summary Introduction

To discuss: The meaning of future value of an investment.

Introduction:

The time value of money implies that the cash in hand at present has a higher value than the cash receipt promised in the future. In other words, time value of money states that the money at present is worth more than the money at a future date. The interest or return earned on the investment will help in offsetting the value lost due to time value of money.

Answer 8

Expert Solution & Answer

Explanation of Solution

The future value of money refers to the amount of dollars that an investment grows over a definite period at a particular rate of interest rate. In other words, it refers to the future value of present cash investments.

Example:

If Person A is invests $100 in a fixed deposit account at 10 percent interest, then the value of $100 after one year (future value) will be $110($100×1.10).

Answer 9

Expert Solution & Answer

Answer 10

Expert Solution & Answer

Answer 11

Conclusion

The future value of money refers to the amount of dollars that an investment grows over a definite period at a given rate of interest rate.

Answer 12

Ch. 4 - Prob. 4.1ACQ Ch. 4 - Prob. 4.1BCQ Ch. 4 - In general, what is the future value of 1 invested...Ch. 4 - What do we mean by the present value of an...Ch. 4 - Prob. 4.2BCQ Ch. 4 - Prob. 4.2CCQ Ch. 4 - Prob. 4.2DCQ Ch. 4 - What is the basic present value equation?Ch. 4 - Prob. 4.3BCQ Ch. 4 - Prob. 4.1C

Explanation of Solution

Want to see more full solutions like this?

Chapter 4 Solutions