Fv of single amount.docx - Fv of single amount 100 6...

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Fv of single amount: 100, 6% compounded annually 100*(1+.06)=106 106*(1+.06)=112.36 Excel: Pv=100 IR=.06 NPER=2 =FV(IR,NPER,0,-PV,0)=112.36. Pv of single amount: FV:500 IR=.1 NPER=5 =-PV(IR,NPER,0,FV,0)=310.46 Or PV=FV/(1+r)^nper FV of ordinary annuity(end): Annual payment: 100 IR=.1 NPER=5 FV of OA=FV(IR,NPER,-Payment,0,0) FV compounding annually: how much is fund now? Pv(1+rate)^NPER 10000(1+.12)^20=96462.93 PV of OA: Payment: 100 IR=.1 NPER=5 PV of OA=PV(IR,NPER,-payment,0,0) Pv of Perpetuity=payment/IR -never stops providing with money at end of year FV of mixed stream: =PV*(1+rate)^# of years to earn interest (1 less than total) Then add each together for FV 600 800 900 .09 =600*(1.09)^2=712.86 =800*(1.09)=872 =900 =712.86+872+900=2484.86 PV of Mixed streams: IR=.08 1-200 Stocks are difficult to value because future dividends, required return,and future growth rate are difficult to obtain FV of Annuity due : Find the FV in excel: =FV(rate,years,payment,0,1) Payment*(1+rate)=FV Basic valuation model: Vo=value of asset at time zero CFt= cash flow expected at the end of the year R=appropriate required return N=relevant time period Bond valuation: Bo= value of bond at time zero I= annual interest rate Rd= discount rate (required returned) M= dollar par value = -pv (discount rate, nper, annual int. paymen t, par value,0) Annual interest payment= face amount*coupon rate *Doesn’t always have annual int. payment Yield to Maturity: do not use excel If, price=par value: par value=coupon rate I=interest payment Bo=current market value M= maturity value n= periods of maturity Excel formula=rate(nper,payment,pv,fv,0,0) Semiannual interest and bond values: (10*2,.09*1000/2,-938,1000,0,0) NPER= years*2 Coupon=coupon rate *face amount of
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