One of the four major time value of money terms; the amount to which an individual cash flow or series of cash payments or receipts will grow over a period of time when earning interest at a given rate of interest.

FUTURE VALUE

Explanation:

Future Value simply refers to the potential value of money at a specific point in time in future.

Based on an assumed growth rate, future value is the value of a current asset at some point in the future.

Formula For Future Value

FV = PV (1+I)^n

where

FV = Future Value

PV = Present Value

I = Interest rate

n= number of compounding periods.

Some benefits of Future Value are:

1. Helps investors to determine value of investment in a set number of years.

2. Investors enjoy security of money.

answer; common market;