- Budgeting
- Cash Management
- Consumer and Mortgage Loans
- Debt and Debt Reduction
- Time Value of Money 1: Present and Future Value
- Time Value of Money 2: Inflation, Real Returns, Annuities, and Amortized Loans
- Insurance 1: Basics
- Insurance 2: Life Insurance
- Insurance 3: Health, Long-term Care, and Disability Insurance
- Insurance 4: Auto, Homeowners, and Liability Insurance
- The Home Decision
- The Auto Decision
- Family 1: Money and Marriage
- Family 2: Teaching Children Financial Responsibility
- Family 3: Financing Children’s Education and Missions
- Investments A: Key Lessons of Investing
- Investments B: Key Lessons of Investing
Case Study #2 Answer
The formula is FV = PV (1 + i)n where PV = present value, I = interest rate, and n = or number of years. The equation would be FV = $2,500 * (1 +.08) 20 or $11,652.39
If you were using a financial calculator, you would clear your memories, then enter the following:
$2,500 = PV
8% = I, which is the interest rate (the annual interest, or discount, rate)
40 = N, or the number of years
You would then solve for FV:
FV = the future value of a sum of money that you have invested. The future value should be $11,652.39.
