<--Back to Wiki Home
Define Future Value of $1 in Real Estate
Future Value of $1:
The "future value of $1" is a term used to describe how much a deposit of one dollar (or any specified amount) will grow in a certain amount of time. It's like planting a seed and watching it grow into a big tree over time.
Formula:
FV = PV x (1 + i)^n
Example:
For example, let's say you deposit $1 in a savings account that pays 5% interest annually. If you leave that money in the account for 10 years, the future value of that $1 will be $1.63. This means that your money grew by 63 cents, just by leaving it in the account and earning interest.
"A Deep Dive for Real Estate Appraisers"
To calculate the future value of $1 using an HP12c calculator, you would use the "FV" key, which stands for "future value". Here's an example of how to do it:
Let's say you want to know how much $1 will be worth in 5 years if you invest it at an annual interest rate of 6%. Here are the steps:
Enter the number of years: Press "5" and then the "N" key.
Enter the interest rate: Press "6" and then the "%i" key.
Enter the present value: Press "1" and then the "CHS" key (to make it negative), and then the "PV" key.
Calculate the future value: Press "FV" and the calculator will display the answer.
The answer should be $1.34, which means that if you invest $1 at 6% interest for 5 years, it will grow to $1.34. You can also use this formula to calculate the future value of any amount, not just $1:
FV = PV x (1 + i)^n
where FV is the future value, PV is the present value, I is the interest rate per period, and n is the number of periods.
"Wit & Whimsy with the Dumb Ox: Unlocking Knowledge with Rhyme:"
The future value of $1, it's quite a thing!
It's like planting a seed and watching it take wing.
You put in a dollar, and let it grow,
And before you know it, it's worth more dough!
Let's say you put it in a savings account,
And leave it there for a certain amount.
If the interest rate is 5%, you'll see,
Your dollar will grow to $1.63, just wait and see!
So remember, the future value of $1,
Is like planting a seed in the financial sun.
It grows and grows, just like a tree,
And helps your money to grow and be free!