ry Bookmarks People Window Help Aplia: Student Question https://courses.aplia.co
ID: 2615724 • Letter: R
Question
ry Bookmarks People Window Help Aplia: Student Question https://courses.aplia.com/af/servlet/quiz?quiz action takeQuiz&q; Keep the Highest: 11/19 APCOA8010100000041ca25e0050000 Attempts: 11 2. Introduction to the future value of money Aa Aa Under the concepts of the time value of money, you can determine the future value of an amount invested today that will earn a given interest rate over a given amount of time. This technique can be used to calculate the future value of (1) a single receipt or payment made or (2) a series of receipts or payments. Mackenzie and Savannah are sitting together, with their notebooks and textbooks open, at a coffee shop. They've been reviewing the latest lecture from Dr. Phillips's financial management class by asking each other questions Today's topic addressed the calculation of future values for both simple and compound interest-earning accounts. Complete the missing information in the conversation that follows. Round your final answer to all computations to two decimal places. However, if you compute any interest factors as an intermediate step in your calculations, round them to four decimal places. Mackenzie So, why is it important to be able to calculate the future value of some amount invested? Savannah First, remember that the amount invested is usually called , and the amount earned during the investment period is called calculate a future value so that you can know in advance what a given amount of principal will be worth after earning a specified It is important to be able to for a known .9 Mackenzie OK, I understand that, and I know the amount of principal invested today can be called the value of the investment, whereas the amount realized after the passage of t period of value. But what causes the present and future values to be different time is called its values? .5 Savannah Two things cause the present and future values to be different amounts. First, the earned during the investment period causes the future value to be greater than, equal to, or less than the present value. Second, the method used to calculate the interest earned-that is, whether the account pays amount by which the future value differs from the present value. interest-determines the Mackenzie That makes sense, and I remember Dr. Phillips saying that the difference between simple and compound interest is that in the case of invested principal, but in the case of principal but also on previously earned interest interest, interest is earned solely on the interest, interest is earned not only on the 28 17Explanation / Answer
Answer 2) only filled value
a : Savannah) principal interest (return) Interest period
b : Mackenzie) Present Value Future Value
C: Savannah) Interest simple or compound
d:Mackenzie) Simple compound
e :Mackenzie) compound
f :Mackenzie) FVA = $ 2540
FVX = $ 2590.058 = $ 2590
FVX - FVA = $50.058
g;Mackenzie) Zero Pronciple 2000 2000 zero (0)
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.