tristatefabricatorsinc

07-17-2006, 10:05 PM

The future value of an amount of money is said to be the value of the amount of money that is allowed at an interest rate over time, and is given by the formula...

FV = PV(1+i)^n

FV = future value

PV = present value

i = the interest rate

n = the number of years (periods)

Find the present value that will have produced $15,000 ten years from now if that present value will earn 10% annual interest (commonly referred to as the discount rate) for the next ten years.

Here is my work so far...

15,000 = PV(1 + .10)^10

I know I need to solve for PV, I am unsure how to continue, can someone give me a hint on the next step?

Thanks!

FV = PV(1+i)^n

FV = future value

PV = present value

i = the interest rate

n = the number of years (periods)

Find the present value that will have produced $15,000 ten years from now if that present value will earn 10% annual interest (commonly referred to as the discount rate) for the next ten years.

Here is my work so far...

15,000 = PV(1 + .10)^10

I know I need to solve for PV, I am unsure how to continue, can someone give me a hint on the next step?

Thanks!