Create your own final scenario for this case which applies the use and calculation of:

(1) present value (PV) and 

(2) future value (FV) concepts 

A PV example I can think of is, you have won the lottery. You may choose to receive half now or the full amount received annually, over 20 years by applying a 6 interest (discount) rate Which do you choose.

A FV example could be, you are 20 years old and want to retire at 55. How much must you put in the bank now to have $2,000,000 at 55, if you can earn 10 on your investments Or, how much would you have to save annually to retire at 55 given a 10 return?

Required: Show your calculations

Answer rating: 100% (QA)

Given data investment 2000000 Discount rate6 Return ... View the full answer