What factors must be considered when calculating present and future  values?

When calculating present and future values, a number of factors must be taken into account in order to determine the true value of an investment or asset. One of the most important considerations is the rate of return which describes how much money an individual can expect to earn from their investment over time. This rate varies depending on the type of investment and can change drastically over time due to market conditions.

In addition, inflation must be accounted for as it affects current purchasing power; if inflation rises then the value of investments decreases in real terms even though they may remain unchanged in nominal terms. Tax implications are also important as they can significantly reduce overall returns if taxes are too high. Finally, other associated costs such as fees or transaction costs must be considered before making any final decisions.

Overall, many factors influence calculations relating to present and future values so it’s important that investors take all these elements into consideration before investing their money so they know exactly what kind of returns they can expect.