Click on one of the three buttons: 'Future Value', 'Present Value', or 'Internal Rate of Return' to choose the type of calculation.
Click on any of the boldfaced numbers in the boxes to change any or all of these three values.
Click "Reset" to start over.
Questions:
Use the table to calculate how much $1,000 would be worth if you invest it at an interest rate of 10 percent for 10 years. (You should click the future value button first.)
If the interest rate falls, what will happen to the future value of your $1,000?
Return the interest rate to 10 percent and change the number of years you leave your investment in place to 20. What happens to the future value of your $1,000?
Click on the present value button and use the table to calculate how much you would have to invest today to have $2,000 in one year's time if the interest rate is 5 percent.
Click on the number of years box and increase the number of years to 10. What happens to the present value of your $2,000?
What happens to the present value if you increase the interest rate?
Click on the internal rate of return button. Use the table to calculate the internal rate of return of an investment that costs $2,000 up front and generates revenue of $250 each year for 10 years.
Suppose the cost of the investment falls to $1,500 but the annual revenue stream remains the same. What happens to the internal rate of return?
