ISE2014_Class5

# ISE2014_Class5 - Class 5 Combining Tools ISE2014 Click to...

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Click to edit Master subtitle style Class 5 – Combining Tools ISE2014 Fall 2010

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Exam Dates Exam 1 – Tuesday September 28th 7:00-8:30pm Exam 2 – Tuesday November 9th 7:00-8:30pm Other exams were conflicting with the old dates, so a change was in everyone’s best interest
Your Toolbox Cash Flow Diagrams F/P P/F P/A F/A A/P

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Annuities Review Annuities are cash flows of equal value that occur in consecutive periods We have 4 tools for manipulating annuities P/A A/P F/A A/F
Annuities Review A graduating high school senior is planning on attending college attending college at a cost of \$40,000 for each of the next 4 years At an interest rate of 3%, he/she wants to know the equivalent value of that tuition in

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Annuities Review Draw a Cash Flow Diagram What are we looking for? m Present Value Setup Problem Use P/A tool X0 = \$40,000(P/A, 3%, 4) X0 = \$40,000(3.7171)
Differed Annuities Now suppose you’re the proud parent of a newborn You anticipate your child going to college for 4 years, but starting 18 years from now

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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_Class5 - Class 5 Combining Tools ISE2014 Click to...

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