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Chapter 3 The Time Value of Money (Part 1)

AT a Glance

LO1 Calculate future values and understand compounding. Future value is the value of an asset at a specific point in time in the future that is equivalent in value to a specific amount today. There is a direct relationship between the future value of an asset and the asset’s present value, growth rate, and time to the future point. Future values grow faster and faster due to interest earning interest, a phenomenon called compounding of interest.
LO2 Calculate present values and understand ...

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