Session 7 Time Value of Money0

# Session 7 Time Value of Money0 - . \$10 \$10 \$10 Year Year 1...

This preview shows pages 1–5. Sign up to view the full content.

Class 7: Time Value of Money  Hye Sun Chang ACCY 303

This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document
Time Value of Money Time Value of Money Present value of an ordinary annuity  is the value  today, given a discount rate, of a series of future  payments    \$10 0 Year  0 Year  1 \$10 0 \$10 0 Year  0 Year  1 Year  2 \$10 \$10 \$10 Year  0 Year  1 Year  2 Year  3 annual interest rate =10%
Time Value of Money Time Value of Money Present value of an n-period annuity   Present value of an infinite series    \$10 0 \$10 0 \$10 0 Year  0 Year  1 Year  2 Year  3  Year  N \$10 0 . . . . . . . . . .

This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: . \$10 \$10 \$10 Year Year 1 Year 2 Year 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . Time Value of Money Time Value of Money Perpetuity A perpetuity is an annuity in which the periodic payments continue indefinitely. PV=periodic payment/r where r=interest rate Next class Next class Read Chapter 6 (pp. 297-323)...
View Full Document

## This note was uploaded on 11/08/2011 for the course ACCY 303 taught by Professor Staff during the Spring '08 term at University of Illinois, Urbana Champaign.

### Page1 / 5

Session 7 Time Value of Money0 - . \$10 \$10 \$10 Year Year 1...

This preview shows document pages 1 - 5. Sign up to view the full document.

View Full Document
Ask a homework question - tutors are online