Which of the following is the equation for future value?

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The equation for future value is correctly represented by FV = PV(1+r)^t. This formula is fundamental in finance, as it calculates the future value of an investment or cash flow based on its present value (PV), the interest rate (r), and the number of compounding periods (t).

In this context, the present value is the amount of money at the current time that will grow over time due to the interest earned on that amount. The term (1+r) represents the growth factor per compounding period, while raising this factor to the power of t accounts for the number of periods over which the investment compounds.

When applying this formula, it’s essential to understand that it compounds the interest across the specified time frame, allowing an investor to calculate how much an investment today will be worth at some future date, which is crucial for financial planning and investment decisions.

The other options represent different formulas related to finance but do not accurately define the standard future value equation. For instance, some focus on calculations pertinent to annuities or alternative growth models rather than the straightforward future value calculation from a single present sum.

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