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
Perpetuity
- Perpetuity is a cash flow without a fixed time horizon.
- To find the present value of a perpetuity, simply take the annual return in dollars and divide it by the appropriate discount rate