**Fin340_ic5_solutions 2**

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**Note that this equation has 4 variables: FV****N****, PV, I/YR, and N. Here, we know all except FV****N****, so we solve for FV****N****. We will, however, often solve for one of the other three variables. By far, the easiest way to work all time value problems is with a financial calculator. Just plug in any three of the four values and find the fourth.**

**Finding future values (moving to the right along the time line) is called compounding. Note that there are 3 ways of finding FV**

**3**

**:**

**Regular calculator: **

**$100(1.10)(1.10)(1.10) = $133.10.**

**$100(1.10)**^{3}**= $133.10. Financial calculator:**

**This is especially efficient for more complex problems, including exam problems. Input the following values: N = 3, I/YR = 10, PV = -100, PMT = 0, and solve for FV = $133.10. **

**Category:**Business, General Business

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