The future value (FV) of a dollar is its present value (PV) plus the opportunity cost of not using that dollar in the present period.

Question

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The future value of a dollar is the amount it will be worth at a certain point in the future, given a certain interest rate or rate of return. The present value of a dollar is its value today, and the opportunity cost is the potential return that could be earned by investing that dollar instead of spending it now. Therefore, the future value of a dollar is calculated as its present value plus the opportunity cost of not investing it in the present period.

The Future Value (FV) of a Dollar Is Its Present