All right, so we have to calculate the future value one more time, and this time the challenge is
that the rate of interest is different for each year.
So let's take the example.
The value today, the value to the present value of an amount is one hundred thousand.
You can see that we have one hundred thousand dollars in our bank to do and we have to calculate the
future value at year five.
But the interest rate for each year, one to five is different.
So if I have to do that manually, how will I do that?
I would say one hundred thousand in year one and then multiply that with 100 percent plus this four
percent.
That is interest rate or one that will close the break.
And I'll press enter no for a year or two.
We have to repeat the same process.
We have to click equals and the value at the beginning of the year that is basically this one.
And then multiply that with one hundred percent plus six percent which is here.
And it was the breakage and press enter.
And now I can actually copy paste this formula downwards and you can see that the value of my money
value of one hundred thousand dollars today after five years will be one hundred and twenty eight thousand
eight two.
Now the good news is that in Microsoft Excel you can do that and just one step.
And that is a formula that is effervesce schedule and then excellent asking you for only two arguments.
The first one is principle.
That is one hundred thousand and the second one is scheduled for the interest rate.
So I will go here on this rate.
I will press the shift, I will keep it press and press my downward.
Don't Iraqi and no other close the bracket or just press control.
Enter on your keyboard and here you go.
So you have the same value, one like twenty eight thousand eight hundred two.
So this is a simple way that you can calculate the future value of your of your present value today.
You can you can convert present value to future value.
Now, one thing that I would like you to notice here is that all the interest rates and the money is
in the cities starting from zero to one, two, three, four.
So if you have a different kind of situation where you have to start from your three, four or five
in between, these formulas won't be working a certain way.
So you will have to get back to your mental style.
So when you are using this formula, you must know the context behind them.
So I really hope that was helpful.
And here we are ending this basically notion of present value and future value.
And in the next section, we are going to start the calculation of net present value.
And then Iraj.