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  3. a. compute the future value at the end of 4 years

a. Compute the future value at the end of 4 years of $900 invested today at...

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General Management

a. Compute the future value at the end of 4 years of $900invested today at an interest rate of 6 per cent and describe twobusiness uses for this specific type of computation.

b. Compute the future value at the end of 4 years of $900 putaway in a savings account each of four years at an interest rate of6 per cent and describe two business uses for this specific type ofcomputation.

c. Explain the time value of money concept and the role ofcompound interest and opportunity cost in time value of moneyconcept as it relates to business planning.

Answer & Explanation Solved by verified expert
3.6 Ratings (530 Votes)
Future value is given byaThus using thisIf today you were to invest 90000 at a rate of 600 youwould have 113623 at the end of 4 time periods eg weeksmonths or years In other words a future value of 113623 isequal to a present value of only 90000What does this mean to you Well if you had a choice betweentaking an amount higher than the 90000 today and taking    See Answer
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