{[ promptMessage ]}

Bookmark it

{[ promptMessage ]}

Instructor%20Notes%20-%20Appendix%20to%20Chapter%206

Instructor%20Notes%20-%20Appendix%20to%20Chapter%206 - p...

Info iconThis preview shows pages 1–2. Sign up to view the full content.

View Full Document Right Arrow Icon
Management 200T Time Value of Money Chapter 6 Appendix Future Value Amount accumulated when interest on an investment is compounded for a given number of periods Compounding refers to the practice of calculating interest for a period on the sum of the principal and interest accumulated at the beginning of the period. Example Formula – FV = PV (1 + r) p Future Value of an Annuity Adding an amount equal to the initial investment on a regular basis Formula – FVA = PMT ((1+ r)
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Background image of page 2
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: p – 1)/ r Example Present Value Value today rather than value in future Formula – PV = FV/ ((1+r) p ) Example Present Value of an Annuity Formula – PVA = PMT (1-(1/(1+r) p ))/r example Management 200T Time Value of Money Chapter 6 Appendix Impact of Compounding Frequency with which interest is compounded affects both future value and present value Prefer to have interest income compounded more often Examples...
View Full Document

{[ snackBarMessage ]}

Page1 / 2

Instructor%20Notes%20-%20Appendix%20to%20Chapter%206 - p...

This preview shows document pages 1 - 2. Sign up to view the full document.

View Full Document Right Arrow Icon bookmark
Ask a homework question - tutors are online