Time Value Formulas - + +--= T r g g r PV 1 1 1 1 $ Annuity...

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Time Value Formulas Single Sum Cash Flow Future Value (FV) of $1 received at “t=0” after “T” periods: ( 29 T r T FV + = 1 1 $ Present Value (PV) of $1 received “T” periods hence: ( 29 T r PV + = 1 1 $ Ordinary Annuities PV of Perpetuity of $1 starting from next period: r PV 1 = FV of Perpetuity of $1 starting from next period: = FV PV of ordinary annuity of $1 for “T” periods: ( 29 + - = T r r PV 1 1 1 1 $ FV of ordinary annuity of $1 for “T” periods: ( 29 - + = 1 1 1 $ T r r FV PV of growing perpetuity of $1 to be received next period with a growth rate “g”: ( 29 g r PV - = 1 $ PV of growing annuity with a cash flow of $1 in period “1” that grows at a rate of “g” until “T” periods: ( 29 ( 29 ( 29
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Unformatted text preview: + +--= T r g g r PV 1 1 1 1 $ Annuity Due FV of annuity due: (FV of ORDINARY ANNUITY)*(1+r) Continuous Compounding Future value of $1 received today after T periods: 718 . 2 , 1 $ = e where rT e Compounding Future Value after T years of $1 with compounding at an annual interest rate r for m times per year: mT m r + 1 1 $ Effective Annual Interest rate (EAIR) The effective annual interest rate when r i s the stated interest rate and m is the compounding period: 1 ) 1 (-+ m m r...
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This note was uploaded on 01/15/2010 for the course FIN 357 taught by Professor Hadaway during the Fall '06 term at University of Texas at Austin.

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Time Value Formulas - + +--= T r g g r PV 1 1 1 1 $ Annuity...

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