Question

List at least two technology tools that can help with calculating future value of an investment. Using complete sentences, explain which tool you prefer to use and why.

Answer 1

Answer:

• scientific or graphing calculator
• TVM solver
• spreadsheet

Step-by-step explanation:

For many future-value calculations, a scientific calculator is a sufficient tool. Of course, one must know the appropriate formula to use.

A good alternative when the calculation is a little messy is a TVM solver or special-purpose financial calculator. I prefer this tool because it requires little more than entering numbers in to the right slots.

Most modern spreadsheet programs and apps come with financial formulas built in. So, they, too, can be easy tools to use for calculating future value. These are especially handy when a number of scenarios need to be explored. (I always have to look up the formulas to see which one is appropriate and what its inputs are. So, I find a spreadsheet less useful for a simple calculation.)