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Time value of money
Maths & Stats
How to find the whether the question is asking present value of annuity or future value of annuity?
Answers (2)
See the applications for which it is used. Something you need to invest now and and you want to get at time of retirement is finding future value. If a firm want to save or estimate any future projects amount and they will discount that to present value along with interest.
For direct questions they will give in question itself. For practical questions you need to find the application of that, whether you need to find what is the today's money if invested how much it is going to get at end of certain period is future value. On contrary, if you want to know tomorrow's value of money as of today you will discount it for present along with interest. Then use formula and solve more and more problems.
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