2 - Time Value of Money
Table of Contents
- TIME VALUE OF MONEY
- Simple Interest
- Compound Interest
- Formula for Calculating Compound Interest
- Fun Formulas
- FV Tables
- Annuities
- FV of an Annuity Tables
- Present Value
- Present Value Tables
- The Most Fun Formulas
- PV of an Annuity Tables
- Intrayear Compounding
- Intrayear Compounding (Example)
- Annuities Dues
- Perpetuity
- Perpetuity Example
- Practice
Text and Images from Slide
Intrayear Compounding (Example)
- invest $5,000 at 8% interest, compounded semiannually, and hold it for five years.
- The interest rate per compounding period would be 4%, ( 8% / 2 ).
- The number of compounding periods would be 10, ( 5 × 2 ).
- Then use these figures in the FV Table or the FV formula