What is the relationship betweenpresent value and future value?• Suppose you need $15,000 in 3 years.If you can earn 6% annually, how muchdo you need to invest today?• If you could invest the money at 8%, wouldyou have to invest more or less than at 6%?How much?

Future Value : FV is that value which will be received in near future. Present Value : PV is that…

Answered: What is the relationship between…

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What is the relationship between present value and future value?

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter5: The Time Value Of Money

Section: Chapter Questions

Problem 4QTD

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Concept explainers

Risk and return

Before understanding the concept of Risk and Return in Financial Management, understanding the two-concept Risk and return individually is necessary.

Capital Asset Pricing Model

Capital asset pricing model, also known as CAPM, shows the relationship between the expected return of the investment and the market at risk. This concept is basically used particularly in the case of stocks or shares. It is also used across finance for pricing assets that have higher risk identity and for evaluating the expected returns for the assets given the risk of those assets and also the cost of capital.

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What is the relationship between
present value and future value?
• Suppose you need $15,000 in 3 years.
If you can earn 6% annually, how much
do you need to invest today?
• If you could invest the money at 8%, would
you have to invest more or less than at 6%?
How much?

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