3.3 One Equation and Four Variables
Our time value of money equation has considerable firepower in that each variable can answer different questions. By rearranging the equation, we can isolate the four different variables on the left side of the equation. Of course, we will need to know the values of the variables remaining on the right side of the equation before we can solve for the variable of concern.
The first form of the equation, (Eq. 3.2), isolates the variable FV at a specific future point in time. This form of the equation can answer a question such as “How much money will I have in my account at a specific point in the future given a specific interest rate?”
The second form of the equation,
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