Chapter 4 - What is the future value of $100 invested today...

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05/07/09 Chapter 4: Time Value of Money 1 Chapter 4 Intro to Valuation: Time Value of Money Introduction/approach to TVM Future value of lump sum (compounding) Present value a lump sum (discounting) Determine interest rate Determine number of periods
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05/07/09 Chapter 4: Time Value of Money 2 Introduction/approach to TVM Importance of TVM Analytical approach to TVM Algebraic TVM “factors” and tables TVM on financial calculator TVM with spreadsheet
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05/07/09 Chapter 4: Time Value of Money 3 Introduction/approach to TVM Comments on using the calculator Clearing memory registers Setting periods to 1 PY TVM buttons N, I, PV, PMT, FV Cash flow buttons CF j , NPV, IRR
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05/07/09 Chapter 4: Time Value of Money 4 Future value of lump sum (compounding)
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Unformatted text preview: What is the future value of $100 invested today for 3 years at 10% interest per year? 05/07/09 Chapter 4: Time Value of Money 5 Present value a lump sum (discounting) How much would I need to invest today to have $1000 in 2 years at 7% interest rate? 05/07/09 Chapter 4: Time Value of Money 6 Determine interest rate If I have $1000 today to invest, what return would I require to have $2000 in 8 years? 05/07/09 Chapter 4: Time Value of Money 7 Determine number of periods How many years would it take to double my $1000 investment if I received an interest rate of 6%? 05/07/09 Chapter 4: Time Value of Money 8 Suggested Chapter-end Problems Chapter 4 Problems 1, 3, 5, 7, 9, 11, 13...
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