TVM - MGMT 411, Fall 2009 Investment Management Time Value...

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Time Value of Money Review August 27, 2009 MGMT 411, Fall 2009 Investment Management
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2/28 What is the Time Value of Money? $100,000 today or $X one year from today…what is your $X value? How much money is it going to take to make you wait one year for your money? This is your personal Time Value Introduction Basics Caveats NPV
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3/28 Time Value of Money “…time value of money is the value of money figuring in a given amount of interest for a given amount of time.” Wikipedia.org Introduction Basics Caveats NPV
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4/28 Notation FV – Future Value PV – Present I – Interest rate (i, r) N – Time or Number of periods (t,n) PMT – Payment or Annuity NPV – Net Present Value IRR – Internal Rate of Return Introduction Basics Caveats NPV
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5/28 Value of a single lump sum How do you move a lump sum through time? First need to assume a rate (i) at which to move your money through time Can set up a timeline to visualize Introduction Basics Caveats NPV
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6/28 Value of a single lump sum: Introduction Basics Caveats NPV
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7/28 Value of a single lump sum: Can Solve for time and interest Introduction Basics Caveats NPV
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8/28 BA II Plus Introduction Basics Caveats NPV Use the highlighted row of keys for solving any of the FV, PV, FVA, PVA, FVAD,
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This note was uploaded on 11/03/2009 for the course MGMT 411 taught by Professor Clarke during the Spring '09 term at Purdue University-West Lafayette.

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TVM - MGMT 411, Fall 2009 Investment Management Time Value...

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