Chapter 5 Spring 2010

Chapter 5 Spring 2010 - CHAPTER 5 Arithmetic Gradients, G:...

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CHAPTER 5 Arithmetic Gradients, G: The Constant Increment to a series of Periodic Payments F/G, G/F “F given G, G given F” P/G, G/P “P given G, G given P” A/G, G/A “A given G, G given A”
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HW Due on 02/04/10 Chapter 5 B.2 D.6 E.2 F.1 * part b) will not be graded but you might want to see if you can work it. The answer is correct. F.4 G.2
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CHAPTER OUTLINE Finding the Present Worth, Future Worth, or Equivalent Series from an Arithmetic Gradient Shifting Cash flow diagrams Manipulating interest rates Complex problems
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Equations – page 126 ( 29 - - + = n i i i G F n 1 1 n 2 i G P = ( 29 ( 29 ( 29 + - + - + = n n n i n i i i i G P 1 1 1 1 ( 29 - + - = 1 1 1 n i n i G A
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Cash Flow Diagrams G G 2G 2G 3G 3G 4G 4G 5G 5G 0 0 1 1 2 2 3 3 4 4 5 5 6 6 G = 0 at time 1 Equation Time 0 is 2 PERIODS prior to the first G
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Cash Flow Diagrams P F A G G 2G 2G 3G 3G 4G 4G 5G 5G P is found 2 periods prior to the first G F is found at the same time as the last G The resulting A from a G starts one period prior to the G and ends at the same time as the G
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Cash Flow Diagrams 0 0 1 1 2 2 3 3 4 4 5 5 6 6 When G A (First value no equal to G) G’s are broken into “A’s” and “G’s” A A G G 2G 2G 3G 3G 4G 4G
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Shifting Cash Flow Diagrams Gradients may or may not be set up to solve for P at t = 0. Renumbering is often needed Periodic Gradients often occur – as did periodic “A’s” in Chapter 4 The n’s must always match the i’s Correct drawing of cash flow diagrams becomes very important
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Example 600 500 700 800 900 1000 1100 1200 1300 0 1 2 3 4 5 6 7 8 9 What is A? What is G?
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This note was uploaded on 02/07/2011 for the course CGN 4101 taught by Professor Wise during the Spring '08 term at University of Florida.

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Chapter 5 Spring 2010 - CHAPTER 5 Arithmetic Gradients, G:...

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