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Glossary
Predicting the Future (Future Value, That Is)

#### Knowledge Check

We've talked a lot about future value and seen many examples of it put to use. Now that you understand it, you should be able to define it. Which of the following is a definition of future value?

 A. Future value is the amount of money we have today B. Future value is present value times the current value. C. Future value is the value of cash at a specified date in the future that is equal in value to a specified sum today. D. Future value is the value of cash today that is equal in value to a specified sum in the future.
Which of the following is the future value equation?

 A. FV=PV (1 + i)n B. PV=FV(10 + i) C. n=PV + FV D. i=PV (FV + 1)
Consider the following scenario. You have \$100. Your brother would like to borrow \$100 from you for two years and pay you back at 5% interest. If you were inserting values into the future value equation, what would you put in place of "PV"?

 A. 100 B. 2 C. 5 D. 500
Consider the following scenario. You have \$250. You are saving for a new car stereo. You put your money in the bank for three years, earning 2% interest. If you were inserting values into the future value equation, what would you put in place of "i"?

 A. 250 B. 2 C. 0.02 D. 3
Consider the following scenario. You have \$250. Your little sister wants to borrow \$200. She'll pay you back \$200 in one year, plus 10% interest. If you were inserting values into the future value equation, what would you put in place of "PV"?

 A. 250 B. 200 C. 0.10 D. 1