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what is the future value in 10 years of $1,500 payments received at the end of each year for the next 10 years? assume an interest rate of 8%.

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tutorconsortium113

The future value of the investment is $193278 The worth of a current asset at a future date based on an estimated rate of growth is known as future value (FV).

Find the future value ?

  • The worth of a current asset at a future date based on an estimated rate of growth is known as future value (FV).Investors and financial planners care about future value because it helps them predict how much an investment made now will be worth in the future.
  • The future value of a lump sum that is compounded can be determined using this formula:

FV = P (1 + r)^nm

   FV = Future value  

   P = Present value = the value of the lump sum today = $1500

   R = interest rate =  APR / frequency of compounding = 8/12 = 0.6666

   m = number of compounding = 12  

   N = number of years = 10

1500x (1 + 0.006666)^(12 x 10)

= 1500 x (1.006666)^120

= $193278

To learn more about Future value refer

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