Future Value

# Future Value - Future Value Question: If you invest \$100 at...

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Future Value Question : If you invest \$100 at 10% for one year, how much money will you have? 1 0 1 \$100 \$?

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Future Value Investing in a Single Period : If you invest \$100 at 10% for one year, how much money would you have? \$ 10 interest (\$100)(10%, or .10) + \$ 100 principal ( original investment ) = \$110 2
Future Value Investing in a Single Period : If you invest for one period at an interest rate of r, your investment will grow to (1+r) per dollar invested. 1 is the return of principal; r is the interest earned. At 10% ( r = 10%), a \$1 investment grows to (1 + . 1), or \$1.10 for each dollar invested. 3

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Future Value Investing in a Single Period : Using a timeline, \$100 invested today ( t =0) for one period at 10% ( r = 10%) is \$110. 4 0 1 \$100 \$110 r = 0.1
Period Investing for more than one period refers to moving a single dollar forward or backward on the timeline for more than one period . 5

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## This note was uploaded on 01/24/2012 for the course FIN 4260 taught by Professor Victorwakeling during the Spring '12 term at Kennesaw.

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Future Value - Future Value Question: If you invest \$100 at...

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