What is future value?
Future value is the value that money today will be worth at some point in the future if invested for a return. For example, we have $100 today, and we invest it for 1 year at 10% interest, then in 1 year the Investment will be worth $110. In other words, the future value of $100 invest for 1 year at 10% is $110. This is because we will still own the original $100 and we also earned 10%, an additional $10. In total our $100 investment will be worth $110 in 1 year. The future value formula is shown below.
What is present value?
Present value is today's value of a future Cash Flow . For example, everyone knows that $100 today is more valuable than $100 in the future, but what about $110, $120 or even $200 in the future. How do we calculate what they are worth today?
To calculate the present value of a future cash flow we would need a few pieces of information. We need to know when to expect the cash flow, the value (future value) of the cash flow, and the Discount rate .
What is the discount rate?
The discount rate is the Opportunity Cost s that you have foregone to receive funds in the future. I know, this may sound confusing but it should eventually click. An easy way to understand the discount rate is to ask yourself this question. What kind of investment returns are available to me? If I had $100,000 today, what would the return be on my investment one year for today? Whatever that rate is would be your opportunity cost and would therefore be your discount rate. (It can be more complicated that this when comparing risk but this is a simplified lesson.)
I have a question: how does the present discount value formula take into consideration the inflation that might happen x years from today? With your lottery example, other than plugging in the numbers in the formula, how do we know for certain that $1,050,000 a year from now is worth about 950,000 today?
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In a world where three billion people are connected online, cars drive themselves and appliances can communicate, global payments are still stuck in the disco era.
Ripple connects banks, payment providers, digital asset exchanges and corporates via RippleNet to provide one frictionless experience to send money globally.
Connectivity across payments networks.
Instant, on-demand settlement.
Real-time traceability of funds.
Low operational and liquidity costs.
Better Than Any Blockchain.
Built on the most advanced blockchain technology that is scalable, secure and interoperates different networks.
Growing Global Network.
Banks, payment providers and digital asset exchanges process and provide liquidity for payments on RippleNet, creating new, competitive cross-border payments services for their customers.
How to buy Ripple.
The payment is easily completed online in minutes by POLi Payments a business from Australia Post and after payment is complete the coins will be sent to your CoinSpot online wallet immediately.
Ripple is a technology that acts as both a cryptocurrency and a digital payment network for financial transactions.
Ripple was released in 2012 and co-founded by Chris Larsen and Jed McCaleb.
The coin for the cryptocurrency is premined and labeled XRP.