Time Value of Money

yeeyee · #1 Aug 15, 2009, 04:48 AM

What is the formula for calculating the following problem?
Take for instance I recently made an investment of X amount of dollars and I'm expecting
X% annual rate of return on my investment and let's say I decide to sell this investment in 6 yrs. I just want to know the correct method of determining how much to sell it for. Can you help?

ArcSine · Aug 15, 2009, 05:46 AM

To realize an annual return of r , on an initial investment of I, after n years, sell it for

$I(1+r)^n$

Be sure to express r as a decimal in that formula.



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