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What is the relationship between interest rate with present value and future value?
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∙ 11y ago
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Wiki User
∙ 11y ago
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The present value of future cash flows has what relationship to interest rate?
The present value of future cash flows is inversely related to the interest rate.
Is the present value factor the exponent of the future value factor?
The present value factor is the exponent of the future value factor. this is the relationship between Present Value and Future Value.
What is the difference between present value interest factors versus future value interest factor?
The Present Value Interest Factor PVIF is used to find the present value of future payments, by discounting them at some specific rate. It decreases the amount. It is always less than oneBut, the Future Value Interest Factor FVIF is used to find the future value of present amounts. It increases the present amount. It is always greater than one.
What does Kindred reveal about the connection between the past and the present?
The past and present have an interdependent relationship. The present relies on the past and the present shapes the future
What effect do interest rates have on the calculation of future and present value How does the length of time affect future and present value How do these two factors correlate?
What effect do interest rates have on the calculation of future and present value, how does the length of time affect future and present value, how do these two factors correlate.
You were in a relationship and your mate said that he wanted you for his future you feel how do you have a future if you don't have a present or can't build your relationship to get to your future?
tell him you don't want to move to fast and you just want to keep things in the present
Why present values are dependent upon interest rates?
Interest rates are also known as discount rates because in order to calculate the present value of a future amount, the future amount must be discounted back to the present
What is the relationship between present and future value?
The relationship is that present value is the current value of future cash flows discounted at the appropriate discount rate. Future values are the amount a present value investment is worth after one or more periods. We learn everything we can in the present so we have some of the answers for the future and what we don't know we ask the pros about. The difference between the two is contributed by time. The value of something (an asset) may typically increase over a period of time. $100 that you give me today is not the same as $100 you give a year later. There is an interest (or return) that accrues when you pay me $100 a year later. The future value after n years of an amount P where R is the rate of interest (in percentage) is calculated as P(1+R/100)**n : using compound interest. If R =50 (that is 50% rate of return, I know it is high) and n = 2 years, the future value of P is P*1.5*1.5=2.25P where is today's value. The Present value can be calculated from the future value as P = F/( (1+R/100)**n ) It is necessary to measure the value of an amount that is allowed to grow at a given interest over a period. This is how the future value is determined.
What is the difference between compounding and discounting?
Compounding finds the future value of a present value using a compound interest rate. Discounting finds the present value of some future value, using a discount rate. They are inverse relationships. This is perhaps best illustrated by demonstrating that a present value of some future sum is the amount which, if compounded using the same interest rate and time period, results in a future value of the very same amount.
What is between past and future?
The present.
The number of payments in future cash flow has what relationship to interest rate?
The number of payments is directly related to the interest rate.
How many latin tenses are there?
There are six main tenses in Latin: present, imperfect, future, perfect, pluperfect, and future perfect. Each tense expresses a different time relationship between the action of the verb and the time being referred to.
