describe the differences between future value and present value of a single deposit?

Answer 1

If you deposit $100.00 in a savings accout, $100 is the present value.

In 30 days, with any interest paid, that deposit will be worth more than $100.00.
Every subsequent month it will be worth more again. By next year the future value will be the original deposit plus a year's interest, which may be compounded on the previous interest paid.

Answer 2

this is otherwise known as "The Time Value of Money."

We all know that time is money. So are investments. The more time you have to keep the money invested, the more money you are likely to make. However, if you don't invest that dollar and put it under your mattress instead, over time the VALUE of that dollar will diminish.

LET ME MAKE AN EXAMPLE WITH INFLATION

If I have $1 now, in 20 years it will still be $1 (if you just put it under your mattress), but it might only be WORTH $.70 in today's money. This is called future value. The value has eroded because of inflation. You know how they say that a dollar today is worth a lot less than it used to be worth? Same thing.

Conversely, if in 20 years the amount of money is $1, in today's dollars it might be worth something like $1.40. This is called present value.

Answer 3

Sounds like homework here...

The future value is the value of a $1 sometime in the future (investing a dollar for a year perhaps)

The present value is the opposite, if you will, the present value of a future $1