A key assumption of the future value formula is that [...] .
Answer
interim interest earned is reinvested at the given interest rate (r)
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#reading-6-tvm
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A key assumption of the future value formula is that [...] .
Answer
?
Tags
#reading-6-tvm
Question
A key assumption of the future value formula is that [...] .
Answer
interim interest earned is reinvested at the given interest rate (r)
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subject 3. The Future Value and Present Value of a Single Cash Flow make a single investment today, its future value, received N years from now, is as follows:
FV = future value at time n PV = present value r = interest rate per period N = number of years
<span>A key assumption of the future value formula is that interim interest earned is reinvested at the given interest rate (r). This is known as compounding.
In order to receive a single future cash flow N years from now, you must make an investment today in the following amount:
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