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Topic: Future value

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Time value of money

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	Invest FAQ: Analysis: Future and Present Value of Money
		Future value is simply the sum to which a dollar amount invested today will grow given some appreciation rate.
		Present value is the value in today's dollars assigned to an amount of money in the future, based on some estimate rate-of-return over the long-term.
		The present value of 10,000 assuming an 8% monthly compounded rate-of-return is 6712.10.
	invest-faq.com /articles/analy-fut-prs-val.html (801 words)

	Future Value of an Annuity
		The Future Value of an Ordinary Annuity (FVoa) is the value that a stream of expected or promised future payments will grow to after a given number of periods at a specific compounded interest.
		The Future Value of an Ordinary Annuity could be solved by calculating the future value of each individual payment in the series using the future value formula and then summing the results.
		The Future Value of an Annuity Due is identical to an ordinary annuity except that each payment occurs at the beginning of a period rather than at the end.
	www.getobjects.com /Components/Finance/TVM/fva.html (436 words)

	FPA Journal - Future Value Calculations and the Geometrically Varying Annuity
		The purpose of this brief paper is to provide a refresher of the three most common types of future value calculations used by financial planners with special emphasis given to the application of the geometrically varying annuity formula.
		The simplest future value calculation involves solving for an unknown value using a present value and a known interest rate and compounding period.
		As such, this paper has served as a brief review of the traditional future value formula, the future-value-of-an-annuity formula and the geometrically varying annuity formula, which are of the utmost importance to financial planners.
	www.fpanet.org /journal/BetweenTheIssues/Contributions/120103.cfm (1120 words)

	The Future Value Fallacy in Estate Tax Planning
		Because of the "magic" of compounding, future values are not proportionate to the interest rate or the growth period.
		Although future value calculations may be useful in helping a client understand the benefits of taxable gifts during lifetime and the benefits (or costs) of charitable "split" gifts or trusts, future value calculations have little or no benefit in other types of planning.
		Future value calculations usually are speculative, confusing, and meaningless and generally should not be used in estate planning calculations or estate planning presentations to clients.
	evans-legal.com /dan/futureval.html (2444 words)

	Ch3
		Note that in present value terms, a cash flow that occurs at the beginning of year 2 is the equivalent of a cash flow that occurs at the end of year 1.
		The differences in future value from investing at these different rates of return are small for short compounding periods (such as 1 year) but become larger as the compounding period is extended.
		The future value of a perpetuity is infinite.
	pages.stern.nyu.edu /~adamodar/New_Home_Page/PVPrimer/pvprimer.htm (4347 words)

	Resources for Present and Future Value Analysis, Notes Receivable and Payable (Site not responding. Last check: 2007-10-12)
		Present value is used in accounting for notes receivable and payable, bond accounting for both the issuer and investor, and in accounting for leases and pensions.
		Accumulation is the process of determining the future value of a known present value.
		For example, the present value of a three period annuity due is simply the sum of the first payment (which occurs immediately) plus the present value of a two period ordinary annuity.
	www.swcollege.com /accounting/students/liab_pvfv_reso.htm (3295 words)

	Future Value of a Dollar
		A future value is a dollar amount that occurs at some point in the future.
		Future values are calculated using compound rates of return (equivalent to compound interest rate returns).
		Future values are calculated using compound rates of return.
	www.uwf.edu /rconstand/5994content2003/T2-TimeValue/T2-TimeValueP04.htm (387 words)

	Time Value of Money
		Future Value (FV) will be reserved for when we are actually solving for a future value.
		Thus the present value of the first cash flow is equal to the cash flow.
		Future Value is largely the same as present value but in reverse.
	www.financeprofessor.com /financenotes/timevalueofmoney.htm (1507 words)

	Present Value of a Dollar
		The present value is the current value of a dollar today that is expected to be received or paid out at some point in the future.
		Future dollar values are restated as present values using an equation that incorporates the Present Value Interest Factor (PVIF).
		Unless stated otherwise, a present value calculation assumes that the future dollar amount that is being discounted occurs at the end of the future time period.
	www.uwf.edu /rconstand/5994content2003/T2-TimeValue/T2-TimeValueP05.htm (468 words)

	Time Value - Money
		The time value of money is one of the most important concepts to understand when dealing with finances.
		The future value is the amount of money that you will have at a given point in the future.
		Understanding the idea of the time value of money gives a head start to anyone that is interested in bettering themselves by taking control of their finances and their lives, because remember money is one of the most essential part of everyone’s lives.
	www.csuchico.edu /wcfi/time_value_-_money.htm (918 words)

	FRB: Vehicle Leasing: Leasing vs. Buying: Future Value
		This future value, called the residual value, is used to calculate your monthly payment.
		If the actual value of the vehicle at lease-end is $8,500, the actual vehicle depreciation over the lease term is $10,500, which is $1,500 more than the lease depreciation you paid.
		If the actual value of the vehicle at the end of the lease is $11,500, the actual vehicle depreciation is $7,500, which is $1,500 less than the lease depreciation you paid.
	www.federalreserve.gov /pubs/leasing/resource/different/future.htm (879 words)

	Review Questions for Present and Future Value Analysis (Site not responding. Last check: 2007-10-12)
		A. The table for the present value of a single payment can be used for determining the number of years required for an investment to reach a given desired amount.
		C. The table for future value of an annuity is used when computing the payment amount for a car loan that calls for an annuity of equal payments, each of which include interest and principal.
		A. Compute the present value of an annuity of ten years and subtract from that amount the present value of an annuity of three years.
	www.swcollege.com /accounting/students/liab_pvfv_rq.htm (1472 words)

	Economics Interactive Tutorial: Discounting Future Income
		The present value of a future income amount is the amount that, if we had it today, we could invest and have it grow to equal the future income amount.
		Notice, by the way, the present value of $200 in two years ($181.41) is less than the present value of $200 in one year ($190.48).
		A reason for using the term "discount rate" when you calculate a present value is that you are taking a larger number, the future value, and calculating from it a smaller number, the present value.
	hspm.sph.sc.edu /COURSES/ECON/Dis/Dis.html (2236 words)

	Future Value
		In general, the future value of a sum of money invested for t years with the interest credited and re-invested at the end of each year is:
		Given a present sum of money and a desired future value, one can determine either the interest rate required to attain the future value given the time span, or the time required to reach the future value at a given interest rate.
		Beginning with the future value equation and given a fixed time period, one can solve for the required interest rate as follows.
	www.netmba.com /finance/time-value/future (370 words)

	Finance Topic: Time Value of Money
		Calculates the present value factor (fractional amount) and present value amount based on your inputs for the amount to be received in the future, annual interest rate and number of times interest is compounded.
		This introduction to future value includes a calculator that outputs the future value given the starting principal, growth rate and years, as well as a bar chart showing how the principal appreciates on an annual basis.
		This introduction to present value includes a calculator that outputs the present value given the future value, growth rate and years, as well as a bar chart showing how present value appreciates on an annual basis.
	www.swlearning.com /finance/students/timevalue.htm (990 words)

	Present Value and CAGR Formula and Calculator / Graph
		Present Value is like Future Value in reverse: you assume you already know the future value of your investment, and want to know what your starting principal will have to be in order to reach your goal in the desired amount of time.
		Solving for either the present value or the interest rate may seem like a pretty backwards way of doing things, but these are very useful techniques.
		You find the equivalent rate of return when you want to know the yield to maturity of a bond at a given market price; and you calculate the present values of future company earnings when you want to know the fair value of a share of stock.
	www.moneychimp.com /articles/finworks/fmpresval.htm (507 words)

	Principals of Corporate Finance 6th Edition - Brealey and Myers
		The total present value of the current and future cash flows (point D in the future) is found by adding this year's flow:
		To keep our diagram simple, we shall assume that you have maximum initial resources of D. Part of this may come from borrowing against future cash flow; but we do not have to worry about that, because, as we have seen, the amount D can always be deployed into future income.
		This is the difference between the discounted, or present, value of the future income and the amount of the initial investment.
	www.mhhe.com /business/finance/bm/npv.mhtml (1702 words)

	SMM: Present and Future Value; Page 9-3, spreadsheet models
		Present value and future value are just techniques for computing the value of an asset at one time given its value at another time.
		Most formulas that you see for computing present value and future value assume that the prevailing interest rate during that interval is constant.
		So if you're computing the future value of, say, a Rembrandt, it might be unwise to use projections of the prime rate in a straightforward application of the future value formula.
	www.chacocanyon.com /smm/sessions/session09/page03.shtml (546 words)

	Bill Well's UW Webcenter: ACCT 215, Final, Time Value of Money
		Although uncertainty surrounds any future event, your advisor feels fairly certain the investment will return at least $200 at the end of this year and each of the seven years thereafter (8 years total), after which the investment will have no further value.
		Forego the opportunity since the present value of the outflows is significantly greater than the present value of the inflows
		Undertake the opportunity since the present value of the inflows is significantly greater than the present value of the outflows
	us.badm.washington.edu /wells/courses/final/timevalue_questions.htm (1136 words)

	Solving Future Value Problems (Site not responding. Last check: 2007-10-12)
		Future value of a single sum: I have a certificate of deposit for $500.
		What is the future value of a series of $1,000 payments made at the end of each year for 5 years if the interest rate is 6% ?
		What is the future value of a series of $1,000 payments made at the beginning of each year for 5 years if the interest rate is 6% ?
	www.unf.edu /~dtanner/StudyHall2071/SG/TVM/futurevalue.htm (760 words)

	SMM: Examples for Session 9: Capital Leases I; spreadsheet models
		This is the future value of a lump sum payment made now.
		First we compute the future value of the stream out to the point where the interest rate changes.
		First we propagate the value back in time to year 20, then propagate it back the rest of the way to the present.
	www.chacocanyon.com /smm/demonstrations/examples09.shtml (1302 words)

	Anything But Ordinary: Calculating The Present And Future Value Of Annuities
		If you understand the time value of money and have an understanding of future and present value (which you can read about in the article Understanding The Time Value Of Money) you're ready to learn about annuities and how their present and future values are calculated.
		Since the present and future value calculations for ordinary annuities and annuities due are slightly different, we will first discuss the present and future value calculation for ordinary annuities.
		The present value of an ordinary annuity is less than that of an annuity due because the further back we discount a future payment, the lower its present value: each payment or cash flow in ordinary annuity occurs one period further into future.
	www.investopedia.com /articles/03/101503.asp (1322 words)

	Future Value (Site not responding. Last check: 2007-10-12)
		A Future is a mechanism which can be used to provide values that will be resolved to another value asynchronously.
		A method/function can return a future to its caller, and continue to compute the value that the future will resolve to in another thread of control (e.g.
		Instead of returning the value immediately (which is not possible), a placeholder for the value - a Future is returned.
	c2.com /cgi/wiki?FutureValue (315 words)

	Savings Calculator for Windows - Future Value of Savings Calculator
		Future Value of Savings Calculator helps you look into the future by allowing you to play with your beginning balance, regular payment amounts, start and end dates, annuity type (regular or due), interest rates, payment frequency and compounding frequency.
		Future Value of Savings Calculator quickly shows you what your savings may be by displaying a range of 77 possible scenarios based upon different interest rates and saving amounts.
		The range of values on the results grid's axes is easily configured by clicking on groups of radio buttons which allow you to set your own range of values displayed on the grid.
	www.wheatworks.com /savings-calculator.htm (316 words)

	Arthur's Javascript Present Value Calculator/Future Value Calculator (PV - FV Calculator)
		Future Lump Sum = a lump sum to be received or paid in the future
		Anyone who uses the present value calculator is fully reponsible for any monetary or non-monetary losses from using the calculator.
		This present value calculator is provided for anyone free of charge as is. The author retains all the copyrights of this calculator.
	www.riskylife.com /calculator/pfcalc.html (257 words)

	Future Value Calculator, a Financial Calculator for Windows
		Future Value of Savings Calculator, $29.95 US, gives you quick answers to your savings and "time value of money" questions by comparing 77 savings scenarios at once.
		Future Value of Savings Calculator allows you to enter a beginning balance, regular payment amount, start and end dates, annuity type (regular annuity or annuity due), interest rate, payment frequency and compounding frequency.
		The ranges of values on the results grid's axes are easily configured by clicking on radio buttons that allow you to set your own range of values displayed on the grid.
	www.futurevaluecalculator.com (310 words)

	Ch. IX.? Present Value
		Following this plan, the amount of money in the account at the end of the two years, the future value (FV) of this income, when time t = 2 can be estimated by looking at how the weekly receipts accumulate once deposited in the savings account.
		This can be explained by the fact that in the continuous model for the computation, the deposits are decreasing continuously rather than discretely and therefore the table will give an underestimate for the continuous, or conversely the continuous model will give an overestimate compared to the discrete model.
		And the present rate of receipt of income is expected to continue at $26000 per year for the next two years and the income could be deposited as it is received in an account paying interest 3% per annum, compounded continuously.
	www.humboldt.edu /~mef2/book/ch9/presentvalue.html (773 words)

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