Do The Math!
The last few weeks have been insane with the amount of Math and Calculation in Finance I am learning and devouring. Sharpening your Finance knowledge is serious business and why learning this makes you a Professional as Investment Advisor. Here is a Finance Calculation that can calculate the Future Value of a Investment as long as you know A. The Present Value. B. The Rate of Return and C. The time involved for the return.
VIDEO – How to Calculate Future Value of a Investment with a basic calculator.
(EASY NASAA/FINRA TEST HOW TO) – Not Semi Annual Calculation
Here is the Calculation to follow to Find the Future Value of a Investment
The present value of $87,500 with receipt of the funds being taken 3 years (t) from today. The desired interest rate of return (r) for these funds is 9%.
To calculate this we will follow this order of operations.
Present Value (PV) = Future Value (FV)
PV = FV (1+interest rate or return)-n
Use Math Order of Operations
PV 87,500 / (1+ .09)3rd power
PV 87,500 / (1.09)3rd power
PV 87,500 / 1.295029
Equals = $67,566.55 Future Value
If you find yourself having trouble? Watch the video on my youtube channel.
I hope you found this Mathematical Formula useful on your way as a Wealth Management, Investment Advisor, or if your just evaluating a Investment to invest in as a Everyday Joe! Im positive this formula will be useful to many.
Godspeed – JS