Present Value Calculations The Time Value of Money. Which would you rather have, $1,000 now or $1,000 in three years?. Since you can invest the $1,000 now and have the $1,000 plus interest in three years, the $1,000 now would be preferable.
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The Time Value of Money
Since you can invest the $1,000 now and have the $1,000 plus interest in three years, the $1,000 now would be preferable.
The answer depends upon the amount of interest that you can earn during the three years, which depends upon the interest rate at which you can invest.
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FV = P * PVA * FV$
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7 Year Annuity and 7 Year Annuity Due
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