1 / 9

Time Value of Money

Time Value of Money. Why do we need TVM?. $ now does not equal $ later Why? Inflation Purchasing power. Key Variables in TVM. PV FV I PMT N. Basic Examples. What is the basic formula for PV? Example #1 Example #2. Annuities. What is an annuity? How do we solve for an annuity?.

ayoka
Télécharger la présentation

Time Value of Money

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

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 • ? • ? • ?

More Related