Table of contents

1. Introduction to Accounting1h 21m
2. Transaction Analysis1h 13m
3. Accrual Accounting Concepts2h 38m
4. Merchandising Operations2h 30m
5. Inventory1h 55m
6. Internal Controls and Reporting Cash1h 16m
7. Receivables and Investments3h 8m
8. Long Lived Assets5h 1m
9. Current Liabilities2h 19m
10. Time Value of Money1h 23m
- Time Value of Money Equations
  35m
- Using Time Value of Money Tables
  47m
11. Long Term Liabilities2h 45m
12. Stockholders' Equity2h 15m
13. Statement of Cash Flows2h 24m
14. Financial Statement Analysis5h 25m
15. GAAP vs IFRS56m

10. Time Value of Money

Time Value of Money Equations

Financial Accounting

10. Time Value of Money

Time Value of Money Equations

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Multiple Choice

Which one of the following variables is the exponent in the present value formula $PV = \dfrac{FV}{(1 + r)^n}$?

r (interest rate)

FV (future value)

n (number of periods)

PV (present value)

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Verified step by step guidance

Understand the present value formula: $PV = \dfrac{FV}{(1 + r)^n}$. This formula calculates the present value (PV) of a future amount (FV) discounted by an interest rate (r) over a number of periods (n).

Identify the components of the formula: PV is the present value, FV is the future value, r is the interest rate, and n is the number of periods.

Recognize the role of the exponent in the formula: The term $(1 + r)^n$ involves raising $(1 + r)$ to the power of n, which means n is the exponent in this formula.

Understand the significance of n: The number of periods (n) determines how many times the interest rate (r) is compounded over time, affecting the discounting process.

Confirm the correct answer: Based on the formula structure, n (number of periods) is the variable that serves as the exponent in the present value formula.