Supplementary formula sheet v1

Supplementary formula sheet v1 - C dollars per period for t...

Info iconThis preview shows page 1. Sign up to view the full content.

View Full Document Right Arrow Icon
Supplementary formula sheet 1 . The future value of $1 invested for t periods at a rate of r per period: Future value = $1 x (1 + r) t 2. The present value of $1 to be received t periods in the future at a discount rate of r: PV = $1/(1 + r) t 3. The relationship between future value and present value (the basic present value equation): PV x (1 + r) t = FV PV = FV I (1 + r) t 4 . The present value of an annuity of
Background image of page 1
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: C dollars per period for t periods when the rate of return, or interest rate, is r: Annuity present value = C x (1 – Present Value Factor) / r = C x (1 – 1/(1+r) t ) / r 5. The future value factor for an annuity: Annuity FV factor = (Future value factor - 1) / r = [ ( 1 + r) t- 1 ] / r 6. Annuity due value = Ordinary annuity value x (1 + r) 7. Present value for a perpetuity: = C / r...
View Full Document

Ask a homework question - tutors are online