 Download Download Presentation Time Value of Money

# Time Value of Money

Download Presentation ## Time Value of Money

- - - - - - - - - - - - - - - - - - - - - - - - - - - E N D - - - - - - - - - - - - - - - - - - - - - - - - - - -
##### Presentation Transcript

1. Time Value of Money

2. Why do we need TVM? • \$ now does not equal \$ later • Why? • Inflation • Purchasing power

3. Key Variables in TVM • PV • FV • I • PMT • N

4. Basic Examples • What is the basic formula for PV? • Example #1 • Example #2

5. Annuities • What is an annuity? • How do we solve for an annuity?

6. Uneven Cash Flow Stream • How do you find the PV of a stream of cash flows that are not equal (i.e. each CF is different)?

7. Amortization • Building an amortization table is a four step process • Step 1 • Step 2 • Step 3 • Step 4 • Repeat steps 2-4 for each row on the table

8. Things to Remember • Interest rates are always assumed to be quoted…? • Signs in the calculator • Time frequency of I, PMT, N

9. Additional Topics • ? • ? • ?