FUTURE VALUE: is the value value of a current asset at a future date based on

an assumed rate of growth. The future value is important to investors and

financial planners, as they use it to estimate how much an investment made
today will be worth in future.
 Question: The first client who has an appointment with John is Anirudh,
a college student. He had won a prize amount of INR 10,000 in a quiz
competition. He wants to invest the amount for a period of 5 years so
that he can use the amount from the investment for joining a computer
course. He wants to know the amount he would receive at the end of
the tenure in order to meet his expenses.
Ans)
Present value =10000
Number of years n= 5 years
Rate of interest r=8%
Future value=?
Future value = present value (1+r)^n
Fv = pv (1+r)^ n
Fv = 10000(1+8/100)^5
Fv=10000(1+0.8)^5
Fv=10000(1.08)^5
Fv=10000(1.46932)
Fv=146932
Therefor The future value is the 146932