Learning Modules: Calculating Future and Present Value of Money PDF

**LEARNING MODULES** NAME: LEARNING ACTIVITY \#01 GRADE & STRAND: BUSINESS FINANCE SECTION: ABM 12 SMITH & BECKER MS. LOUISE ANGELICA P. OCHEA QUARTER 2 MODULE 1 CALCULATING FUTURE AND PRESENT VALUE OF MONEY INTRODUCTION The time value of money would tell us that a peso today is not equal to a...

**LEARNING MODULES** NAME: LEARNING ACTIVITY \#01 GRADE & STRAND: BUSINESS FINANCE SECTION: ABM 12 SMITH & BECKER MS. LOUISE ANGELICA P. OCHEA QUARTER 2 MODULE 1 CALCULATING FUTURE AND PRESENT VALUE OF MONEY INTRODUCTION The time value of money would tell us that a peso today is not equal to a peso in the future. OBJECTIVES At the end of this lesson, you will be able to - Define future value and time value of money - Solve future value and present value of money - Appreciate the application of future and present value of money in business transactions. - Is the concept that money you have now is worth more than the identical sum in the future due to its potential earning capacity. - Is the value of a current asset at a future date based on a 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 the future. FUTURE VALUE OF MONEY FORMULA [\$\\text{\\ \\ \\ \\ \\ }FV = PV\\ (1 + \\frac{i}{n})\^{\\text{nt}}\$]{.math.inline} Where: 1. Find the future value of P1,000 compounded at 10% annual interest at the end of one year, two years, and five years. Given [\$\\text{\\ \\ \\ \\ \\ }FV = PV\\ (1 + \\frac{i}{n})\^{\\text{nt}}\$]{.math.inline} [\$\\text{\\ \\ \\ \\ \\ }FV = PV\\ (1 + \\frac{i}{n})\^{\\text{nt}}\$]{.math.inline} - Linda would like to buy a car two years from now using the proceeds of a 20% investment that is semiannually. If the projected price of the car is P1,400,000, how much money must be invested today to earn the price of the car? *PV =* 956,218. 837