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School of Administrative Studies Atkinson Faculty of Liberal and Professional Studies York University ADMS 3530.03 Finance Summer 2007 Final Exam Formula Sheet Time Value of Money FV = ( 29 t r 1 Investment + × PV = ( 29 t r 1 Value Future + PV of a perpetuity = r C PV of a growing perpetuity = g r C 1 - PV of an annuity = + - × t ) r 1 ( r 1 r 1 C = + - × - r ) r 1 ( 1 C t (easier to calculate) FV of an annuity = - + × r 1 ) r 1 ( C t PV of a growing annuity = + + - × - t 1 r 1 g 1 1 g r C Annuity factor = + - t ) r 1 ( r 1 r 1 = + - - r ) r 1 ( 1 t (lower version is easier to calculate) PV of an annuity due = (1+r) × (PV of an annuity) FV of an annuity due = (1+r) × (FV of an annuity) 1 + Real rate = rate Inflation 1 rate Nominal 1 + + APR = Period Rate × m EAR = ( 29 1 Rate Period 1 m - + Period Rate = 1 ) EAR 1 ( m 1 - + where m = number of periods per year Bonds and Stocks Price of a bond = PV (Coupons) + PV (Face Value) = t t ) r 1 ( Value Face ) r 1 ( r 1 r 1 C + + + - × Current yield = price Bond payment coupon Annual Yield to maturity (YTM) = interest rate for which the present value of the bond’s 1

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payments equals the price Approximate YTM = 2 price current value face maturity to years price) current - value (face payment coupon Annual + + Rate of return = price
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