ISE2014_Class4

ISE2014_Class4 - Class 4 F/P and P/F ISE 2014 Click to edit...

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Click to edit Master subtitle style Class 4 – F/P and P/F ISE 2014 Wednesday Sept. 1st
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Your Toolbox Cash Flow Diagrams
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Europe 1200 AD Most of Europe still used the Roman number system (I, V, X, etc) Roman system terribly suited for doing math calculations Europe lagged behind other cultures who had already adopted the Hindu-Arabic system This was a huge drain on European trade and commerce
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The Hindu-Arabic System1
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The Man Who Changed Leonardo of Pisa, also know as Fibonacci Born to an Italian trader from Pisa, he helped his father manage a trading post in modern Bejaia, Algeria He learned the Hindu-Arabic system and spent his youth studying around the Arabic world
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The Man Who Changed Around 1200 Fibonacci returned to Pisa and published one of the most important books ever written – Liber Abaci His book is credited with popularizing Hindu-Arabic numbers in Europe, and hence our modern number system Using his experience as a merchant he was able to show the practical benefits of the system
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How Does This Relate to How did he demonstrate the practical benefits? He gave Europe our first tool! *Drumroll* The F given P calculation (F/P,i,N)
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F/P This tool is used to calculate the future value (F) of an investment given its present value (P) The formula is F = P(1+i)N 7 look familiar? F = Future Value P = Present Value i = interest rate (compound) N = number of periods
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How Did This Help? At the time it was difficult for merchants to
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This note was uploaded on 02/28/2011 for the course ISE 2014 at Virginia Tech.

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ISE2014_Class4 - Class 4 F/P and P/F ISE 2014 Click to edit...

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