PresentValueaPresent Value of an amount received in one year.Solving theFutureValue EquationFV = PV*(1+i)FVPV=(1+i)4-11
4-11 Present Value Present Value of an amount received in one year. Solving the Future Value Equation FV = PV*(1+i) (1 i) FV PV + =
CPresentValue0Example:$100 received in one year, i=5%PV=$100/(1+.05)=$95.24Note:FV = PV*(1+i) = $95.24*(1.05)= $1004-12
4-12 Present Value Example: $100 received in one year, i=5% PV=$100/(1+.05) = $95.24 Note: FV = PV*(1+i) = $95.24*(1.05) = $100