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Foundation 3 slides

# Foundation 3 slides - Time Value of Money Question You are...

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1 Time Value of Money Question You are offered two options to receive a cash payment. Option A: \$100 today Prof. Q. Ma HADM 2222: Time Value of Money 0 Option B: \$107 in future year t Which one is more valuable to you? General Question Earlier time Later time Prof. Q. Ma HADM 2222: Time Value of Money 1 Time Line \$\$\$\$ (PV) \$\$\$\$\$\$ (FV) Learning Objectives Be able to compute The FV of a cash payment made today The PV of cash at some future date The return (r) on an investment The number of periods (T) that equates a PV Prof. Q. Ma HADM 2222: Time Value of Money 2 The number of periods (T) that equates a PV and an FV given an interest rate (r) Be able to use a financial calculator to solve TVM problems

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