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→Present and Future Value - an example: Spelling/Grammar Check, typos fixed: the the → the
<math>FV = \$950 \cdot (1+0.05) = \$997.5</math>
<math>FV = \$950 \cdot (1+0.05) = \$997.5</math>
So the Future Value of the $950 is less than what we would have to pay for the product in the future. This means that we wouldn't be able to pay the $1000 for the product using only the the $950 we invest today. So it's better to pay right away.
So the Future Value of the $950 is less than what we would have to pay for the product in the future. This means that we wouldn't be able to pay the $1000 for the product using only the $950 we invest today. So it's better to pay right away.
We also could have calculated the Present Value of "$1000 in one year":
We also could have calculated the Present Value of "$1000 in one year":