Future value: A nominal value of an asset or investment at a specific period with an assumed interest rate is termed future value. Future value can be computed by multiplying the amount invested at the present with the future value factor. Present value: The actual or current worth of a future sum of money that is invested refers to the present value. Generally, the present value of an investment will be lesser than its future value or it might remain the same. The present value is also known as discounted value. It is useful to calculate bond yields, net present value , and spot rates. To determine the bid to be accepted by Company W.

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Chapter 6, Problem 3P

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Future value: A nominal value of an asset or investment at a specific period with an assumed interest rate is termed future value. Future value can be computed by multiplying the amount invested at the present with the future value factor.

Present value: The actual or current worth of a future sum of money that is invested refers to the present value. Generally, the present value of an investment will be lesser than its future value or it might remain the same. The present value is also known as discounted value. It is useful to calculate bond yields, net present value, and spot rates.

To determine the bid to be accepted by Company W.

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