Question

An NBA player is receiving $15 million at the end of each of the next seven years. He can earn 6 percent per year on his investments. What is the present value of his future revenues?

Use the FV function to determine the value to which $100 accumulates in three years, if you are earning 7 percent per year.

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Answer 1

An NBA player is receiving $15 million at the end of each of the next seven years. He can earn 6 percent per year on his investments. What is the present value of his future revenues?

Here is how the FV function works

FV( interest_rate, number_payments, payment, [PV], [Type] )

In our case -

interest_rate = 6

number_of_payments=7

payment = 15,00,0000

[PV] = 0 because we don't have an initial deposit amount

[Type] = will be 0 because we are finding the interest at the end of each year and not at the beginning

=FV(6%,7,-15000000,0,0)

will return value :

$125,907,564.75

___________________________________________________________________________________________________

Use the FV function to determine the value to which $100 accumulates in three years if you are earning 7 percent per year.

In our case -

interest_rate = 7

number_of_payments=0

payment = 0

[PV] = 100 because we don't have an initial deposit amount

[Type] = will be 0 because we are finding the interest at the end of each year and not at the beginning

=FV(7%,3,0,-100,0)

will return value:

$122.50

Here is the screenshot of the formulae

Thank you !