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Define Future Value of $1 Per Period in Real Estate
Future Value of $1 Per Period:
The "future value of $1 per period" is a term used to describe how much a series of payments of one dollar (or any specified amount) will grow over time. It's like saving a little bit of money every week or month, and watching it grow into a larger amount over time.
Formula:
FV = PMT x (((1 + i)^n - 1) / i)
Example:
For example, let's say you make a payment of $1 at the end of every month for 10 years, and the interest rate is 5% per year. The future value of that stream of payments would be $147.26. This means that by saving $1 a month for 10 years and earning interest, your money grew to $147.26.
"A Deep Dive for Real Estate Appraisers"
To calculate the future value of $1 per period using an HP12c calculator, you would use the "PMT" key, which stands for "payment", along with the "FV" key for future value. Here's an example of how to do it:
Let's say you want to know how much a stream of payments of $1 per month 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 payment amount: Press "1" and then the "CHS" key (to make it negative), and then the "PMT" key.
Enter the present value: Press "0" and then the "PV" key (since there is no initial investment).
Calculate the future value: Press "FV" and the calculator will display the answer.
The answer should be $79.61, which means that by saving $1 per month for 5 years at 6% interest, your money will grow to $79.61. You can also use this formula to calculate the future value of any amount:
FV = PMT x (((1 + i)^n - 1) / i)
where FV is the future value, PMT is the payment amount, 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 per period, it's quite a feat!
It's like planting a little seed and watching it grow to a treat.
You make a payment of $1 every period you choose,
And watch your money grow, it's quite a ruse!
Let's say you save $1 every month for 10 years,
And the interest rate is 5%, there are no fears.
Your payments grow and grow, just like a tree,
And the future value is $147.26, oh what a spree!
So remember, the future value of $1 per period,
Is like saving a little bit, and watching your money grow as a reward.
It's one of the six functions of a dollar, so don't be deterred,
Save your money wisely, and watch it grow, oh what a word!