I am struggling with the terminologies, and quickly and confidently relating suc
ID: 2474465 • Letter: I
Question
I am struggling with the terminologies, and quickly and confidently relating such terminology to the tables.
What I want to do is list out each of the factors, and do my best to express them in English. What I would like a kind person to do is take a look at my understanding and either affirm it, or correct it. I think I would benefit most, if you use the same format I will use, and simply state it.
I know that in simple English one should say Find the Future Given the Present Value; and to any normal person that should be sufficient enough to proceed. However, I don’t know what it is, every time I try to apply it, I start to doubt and then I’m screwed.
I will list them out here:
F/P
This means, Im going to put some money in a place and watch it grow. So when solving a numbers problems I should expect to use this where I am today making a deposit, and want to crunch some numbers to find out what that deposit will be worth tomorrow.
Does that sum it up?
Is my interpretation the only reference frame it works in? if not, how else could I express it?
P/F
This can be used where if I had a rich great grandparent who dumped a bucket load in an account for me, and 30 years later it’s worth a fortune. If I wanted to estimate how much he put in there for me in terms of what it was worth 30 years ago.
Is there any other way I could use this?
A/F
These seem to be relatively small numbers, so I am going to guess it’s similar to the grandpa scenario. Except that he made yearly deposits.
A/P
This is me wanting to calculate how much my money will be worth 10 years from now if I invest the same amount every year for 10 years.
F/A
I think this might what I put for A/P. See, Im lost now. I’ll try to guess. This is me doubling my money every year, because each year I am investing the same, and each year it is gaining interest. But I am calculating today what it will be worth 10 years from now. Pretty much the same thing I said for A/P.
Please help.
P/A
So this is me pretending to be a year from now, and wondering how much a single annuity is worth.
A/G
Every year, I’m putting in X amount, but that X amount grows by x amount because of interest. Therefore, this factor will tell me how much 10 years from now my money is worth, plus the interest.
P/G
Presently, I am putting away 100 bucks per year, and each year, I add 100 to that. So, this will tell me how much it will be worth 10 years from now if this pattern continues.
I’m slightly embarrassed, I hope someone can copy my format, and give me brief examples. I will turn them into flash cards. But more importantly, I want to compare the result to my own understanding so that I can know why I’m wrong.
Thanks for your time.
Explanation / Answer
This means, Im going to put some money in a place and watch it grow. So when solving a numbers problems I should expect to use this where I am today making a deposit, and want to crunch some numbers to find out what that deposit will be worth tomorrow.
Does that sum it up?
No, need data
Is my interpretation the only reference frame it works in? if not, how else could I express it?
No, In a simple format
This can be used where if I had a rich great grandparent who dumped a bucket load in an account for me, and 30 years later it’s worth a fortune. If I wanted to estimate how much he put in there for me in terms of what it was worth 30 years ago.
Is there any other way I could use this?
By the use of NPV (Net Present Value)
A/F
These seem to be relatively small numbers, so I am going to guess it’s similar to the grandpa scenario. Except that he made yearly deposits.
A/P
This is me wanting to calculate how much my money will be worth 10 years from now if I invest the same amount every year for 10 years.
Required Interest rate
I think this might what I put for A/P. See, Im lost now. I’ll try to guess. This is me doubling my money every year, because each year I am investing the same, and each year it is gaining interest. But I am calculating today what it will be worth 10 years from now. Pretty much the same thing I said for A/P.
Use PxRxT /100 formula
So this is me pretending to be a year from now, and wondering how much a single annuity is worth.
Every year, I’m putting in X amount, but that X amount grows by x amount because of interest. Therefore, this factor will tell me how much 10 years from now my money is worth, plus the interest.
x-10X
Presently, I am putting away 100 bucks per year, and each year, I add 100 to that. So, this will tell me how much it will be worth 10 years from now if this pattern continues.
(100 +100)x10 = 2000
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.