Present and future value of 1 Simplified.

Описание: In this video, we explain the present value and future value of a single amount.

Accounting or finance student? Click to access your free trial:
https://farhatlectures.com/

Understanding Present Value (PV) and Future Value (FV) of a Single Amount
Present Value (PV) and Future Value (FV) are fundamental financial concepts used to evaluate the value of money over time. These concepts account for the time value of money (TVM), which states that a dollar today is worth more than a dollar in the future due to its earning potential.

1. Future Value (FV) of a Single Amount
Definition: Future Value represents the amount an initial investment (principal) will grow to at a specific time in the future when compounded at a given interest rate.

Present Value and Future Value are critical tools for evaluating financial decisions involving cash flows over time. By understanding these concepts, individuals and businesses can make informed choices about investments, savings, and other financial opportunities while accounting for the time value of money.

Present Value (PV) of a Single Amount
Definition: Present Value is the current worth of a sum of money to be received in the future, discounted at a specific interest rate.

#cpaexam #accountingtutorials #accountingandfinance