BUSI 2504 Study Guide - Bmw M54, Liquid Oxygen, Bmw M52

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Lo1 how to determine the future value of an investment made today. Lo2 how to determine the present value of cash to be received at a future date. Lo3 how to find the return on an investment. Lo4 how long it takes for an investment to reach a desired value. Answers to concepts review and critical thinking questions. 8. (lo1, 2) compounding refers to the growth of a dollar amount through time via reinvestment of interest earned. It is also the process of determining the future value of an investment. Thus, our answer does depend on who is making the promise to repay. (lo2) the price would be higher because, as time passes, the price of the security will tend to rise toward . This rise is just a reflection of the time value of money. As time passes, the time until receipt of the grows shorter, and the present value rises.