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PV being present value, FV future value and time. Also, how would one figure out the amount of time it takes for an amount to reach a certain amount...let's say $400 to 1,000 at an interest rate of 4?

2007-01-29 11:48:33 · 3 answers · asked by Hector P 1 in Business & Finance Renting & Real Estate

3 answers

400*(1.04^N)=1000
1.04^N=2.5
LN1.04^N=N*LN1.04=LN2.5
N=LN2.5/LN1.04=.916291/.039221
=23.36 years

2007-01-29 11:56:28 · answer #1 · answered by fcas80 7 · 0 0

Future Value = Present Value*(1 + Interest rate )^t

so take the present value and multiply it by 1 plus the interest rate (4% = .04 ) raised to the power of the # of years

example:

PV = 500
interest rate = 5%
invested for 5 years

500*(1.05)^5 = $638.14

for your other question.....

PV=400
FV=1,000
interest=4%

1000=400(1.04)^X

solve for the exponent "X"

2007-01-29 12:02:27 · answer #2 · answered by dwanzor 2 · 0 0

Using a financial calculator HP-12C
400 CHS PV
1000 FV
4 i
N=24 years if componding yearly with a 4% interest rate
For interest rate
400 CHS PV
1,000 FV
Enter number of years N
Hit i and then rate will appear for yearly

2007-01-29 14:51:46 · answer #3 · answered by tianaramal 4 · 0 0

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