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What is the future value of 450 at an interest rate of 15 percent two years from today?
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Why is the price of a bond inversely related to the rate of interest?
A bond pays fixed (defined in the bond) cashflows at discrete points in the future. If interest rates are hight, these future fixed amounts are of lesser value in the present than when interest rates are low. For example, if I were to pay you $100 in one year and interest rates are 10%, then the value of the money, in today's value is $90.91. If interest rates were zero, then it would be worth $100 today. A bond's value is merely the sum of a whole bunch of examples like this.
If the interest rate is zero the future value interest factor equals?
1.0
What is value of money?
The time value of money is based on the premise that an investor prefers to receive a payment of a fixed amount of money today, rather than an equal amount in the future, all else being equal. In particular, if one received the payment today, one can then earn interest on the money until that specified future date. All of the standard calculations are based on the most basic formula, the present value of a future sum, "discounted" to the present. For example, a sum of FV to be received in one year is discounted (at the appropriate rate of r) to give a sum of PV at present. Some standard calculations based on the time value of money are: : Present Value (PV) of an amount that will be received in the future. : Present Value of a Annuity (PVA) is the present value of a stream of (equally-sized) future payments, such as a mortgage. : Present Value of a Perpetuity is the value of a regular stream of payments that lasts "forever", or at least indefinitely. : Future Value (FV) of an amount invested (such as in a deposit account) now at a given rate of interest. : Future Value of an Annuity (FVA) is the future value of a stream of payments (annuity), assuming the payments are invested at a given rate of interest. The time value of money is based on the premise that an investor prefers to receive a payment of a fixed amount of money today, rather than an equal amount in the future, all else being equal. In particular, if one received the payment today, one can then earn interest on the money until that specified future date. All of the standard calculations are based on the most basic formula, the present value of a future sum, "discounted" to the present. For example, a sum of FV to be received in one year is discounted (at the appropriate rate of r) to give a sum of PV at present. Some standard calculations based on the time value of money are: : Present Value (PV) of an amount that will be received in the future. : Present Value of a Annuity (PVA) is the present value of a stream of (equally-sized) future payments, such as a mortgage. : Present Value of a Perpetuity is the value of a regular stream of payments that lasts "forever", or at least indefinitely. : Future Value (FV) of an amount invested (such as in a deposit account) now at a given rate of interest. : Future Value of an Annuity (FVA) is the future value of a stream of payments (annuity), assuming the payments are invested at a given rate of interest.
What happens to the future value of money when the inflation rate exceeds the interest rate?
it increases
How do insurers determine appropriate premiums for policy holders?
insurers set premiums based on the equivalence principle where they set the present value of future outgo to the present value of future benefits. the calculations allow for an implicit profit due to interest spreads.
The future value of a 1000 investment today at 8 percent annual interest compounded semiannually for 5 years is?
$1480.24
What is the future value of 1200 a year for 40 years at 8 percent interest?
What is the future value of $1,200 a year for 40 years at 8 percent interest? Assume annual compounding.
What is the future value of 25000 at 8 percent interest in 10 years?
Future value= 25000*(1.08)10 =53973.12
What is the future value of 80000 dollars with 5 percent interest in 4 years?
102102.52
What is the future value of 80000000 dollars with 5 percent interest in 30 years?
200000000 dollars
What is the future value of 100 a year for 10 years earning 4 percent interest?
Assuming the interest is compounded annually, the future value is 100*(1.04)10 = 100*1.4802 (approx) = 148.02
What is the future value for 10000 invested for 5 years with an annual interest rate of 8 percent?
$14,693.28
What is the future value of 40000 with 5 percent interest in 5 years?
The face value is 40000*(1.05)10 = 65156 approx.
What is today's value of 1948 10000?
The value today, of 10,000 dollars from 1948 will be about 99,500 dollars. This is estimated at an interest rate of three and a half percent.
What is the future value of 10000 for an interest rate of 16 percent and 1 annual period of compounding?
With only one year the value is 11600
What is the future value of 40000 dollars with 5 percent interest in 10 years?
The face value is 40000*(1.05)10 = 65156 approx.
What is the future value of 1200 after 5 years if the appropriate interest rate is 6 percent compounded monthly?
1862
