What is the difference between present values and future values?

Fin 419 Week 2 Complete (finance to decision-making)

The present value of an asset or money is its current value. It can be discounted to reflect the time value. It can be calculated taking into consideration factors such as investment returns and inflation. The future value of an asset is the sum of its present worth and interest rates. It also includes any income received along the journey. A $1,000 investment today would yield a return of 5%, which is calculated monthly. The future value for that asset will be $1,050 one year from now.

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