For example you tak Now can be invest and generate profits or returns on investment. To calculate PV a mathematical formula is usually us involving interest rates and time periods. For example you have two options receive IDR million now or IDR million years later. If you can invest the money at an interest rate of per year then accepting IDR million now would be a better decision. Because if invest in years the money will increase to more than IDR million. Also read Net Present Value Definition Benefits Formula and Differences from Present Value.
The future value of money For example you tak
Future Value The second concept Mexico WhatsApp Number List is Future Value FV which is the amount of money you will earn in the future for the money you have invest now. This illustrates the potential growth of money over time. For example if you save IDR thousand per month in a savings account with an annual interest rate of how much money will you have in total in years Using the FV formula you can calculate that your total money will be around IDR million after years. Annuity value Annuities The third concept is annuities which include a series of payments or receipts of money at certain time intervals.
There are two main types
Annuities namely ordinary France Phone Number List annuities and initial annuities. Annuities can be us to calculate loan payments monthly investments or other regular cash flow. To calculate it requires a special formula that takes into account the interest rate annuity amount and time period. e out a loan of IDR million with an annual interest rate of . You agree to repay this loan in the form of a monthly annuity for years. Then you want to know how much your monthly payments will be. Using the annuity formula you can calculate that your monthly payments will be around . Also read Company Financial SOP Examples and Download Templates Here Formula for Calculating.