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The present value represents the amount of money you would have to deposit today in order to match what you would get from the income
The present value represents the amount of money you would have to deposit today in order to match what you would get from the income stream at the future date. The formula is
Present Value
Future value represents the total amount of money you would have if you deposit the income stream until a future date. The formula is
Future Value
To start our problem we need to identify the variables.
Time years
Rate dollarear
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