Clutch Prep is now a part of Pearson
Ch. 10 - Time Value of MoneyWorksheetSee all chapters

# Time Value of Money Equations

See all sections
Sections
Time Value of Money Equations
Using Time Value of Money Tables

Concept #1: Time Value of Money and Using Timelines

Concept #2: Time Value of Money Equation: Future Value

Practice: The formula FV = PV * (1 + r)n is best used for:

Practice: You invest $4,545 in Clutch Bank today earning a juicy 10% annual interest. What is the value of your investment in one year? What is the value of the investment after two years? Practice: The formula PV = FV (1 + r)n is best used for: Practice: You are saving up$12,000 for a luxurious European vacation two years from now. How much money would you need to invest today at Clutch Bank, earning their juicy 10% annual interest, to have enough for your vacation? How much would you need to invest today, if instead you could only earn 6% interest?

Example #1: Time Value of Money

Concept #3: Annuity

Practice: Today, you purchased a \$1,000 bond that matures in 5 years. The bond pays annual interest of 10%. Visualize these cash flows on a timeline.