Posted by **John** on Saturday, June 9, 2012 at 11:23am.

Often in personal finance we want to know what our $1 investment today will be worth in 20 years. In business however, there is more concern with answering the question, “If I receive $100 in 5 years, what is that worth today?” To answer this question, modify the formula fv = pv*((1+i)^n) and use the reciprocal. Simply stated, the reciprocal of a number is 1 divided by the number; the reciprocal of 10, for example, is 1/10. In the formula above, we divide both sides by ((1+i)^n), which creates a new formula where the fv is multiplied by the reciprocal of the original: fv*(1/((1+i)^n))=pv. Select an interest rate and number of periods—be sure your numbers are different from other students who already answered this question—to calculate the present value of $100 received in the future. What would the value of $100 in the future be today given the interest rate and number of periods you selected?

## Answer this Question

## Related Questions

- Finance - If an investment of $5,000 today earns 5% in each of the next five ...
- business - A usefful personal and business investment site with in-depth detail ...
- Finance Help! 3 questions - Hi, i was wondering if someone could please help me ...
- Finance - Your friend claims that he invested $5,000 seven years ago and that ...
- Math Personal Finance - What is the present value of an investment that will be ...
- Math Personal Finance - Assume an investment of $100 earns an APR (Annual ...
- Math Personal Finance - What is the present value of an investment that will be ...
- FINANCE 200 - You receive $5000 three years from now. The discount rate is 8 ...
- Finance - The Mutual Assurance and Life Company is offering an insurance policy ...
- Corporate Finance - An investment today of $3,3OO is worth $10,000 IN 8 YEARS. ...