Why use future value?

1 Answer
Jul 3, 2015

Because you ask an important question that can be answered using future value.


It is a great tool for answering important questions. For example, "will I have enough for my first year's tuition, which I expect will cost $20,000, when I go to university in 10 years?" How much you will have depends upon how much you have now, and the rate at which you can invest your money for the next 10 years. If you plan to add to your present sum each year, we can factor that into the answer.

Using time value of money techniques, it would be easy to make the calculations and answer your question.