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Lecture Notes

These formulas may be fun. They may not be. If you see the first line, it's just the last line from the previous slide. The future value is equal to the present value times 1+R^t. Using algebra, we can simplify this to find the present value is the future value divided by 1+R^t. So if you just keep in mind that 1+R^t is consistent, 1 is multiplied by that term while the others divided. The rest of the slide depicts the present value interest factor as well as how that's sometimes noted where you'll see the interest rate and the number of compounding periods in brackets