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Write the difference between present value and future value.
The major differences between present value and future value are as follows −
Current value of cash flow in future.
Current value of an asset or an investment at starting of a particular time period.
Inflation is considered.
Discount rate and interest rate are considered.
Helps investors in decision making.
Discounted process/method is followed.
Present value = (cash flow)/ (1 + r)^n.
Value of future flow after certain future period.
Value of an asset or an investment at the end of a particular time period.
Inflation is not considered.
Only interest rates are considered.
Least considered by investors in making investment decisions.
Capitalization process/method is followed.
Future value = (present value) or (cash flow) (1 + r)^n.
- Write the difference between present value and net present value.
- What is the difference between Market Value and Present Value?
- Difference between Net Present Value (NPV) and Profitability Index (PI)
- Difference between Capital Cash Flow (CCF) and Adjusted Present Value (APV) Approaches
- Difference between book value and market value.
- What is the difference between Book Value and Replacement Value?
- Present value of money is 2500, which is invested at 10% and time of investment is 2 years. Calculate the future value.
- Difference between Forward and Future Contract
- What is the difference between Liquidation Value and Going Concern Value?
- Difference between Book Value and Market Value of a Share
- Differentiate between discounted Net present value and Internal rate of return.
- How to calculate net present value using Net present value (NPV)?
- Difference between Call by Value and Call by Reference
- Differentiate between fair value and market value
- Write the difference between debentures and bonds.