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Finance test 2 cheat sheet

# Finance test 2 cheat sheet - Future value of multiple cash...

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Future value of multiple cash flows: NPV( Discount rate,yr0 CF, {CF1,CF2,CF3}, {FreqCF1, Freq cf2})* (1+Discount rate)^years Annuity Present value(pay equal payments) PV= C*([1-{1/(1+r)^t}]/r); Fv=C*({(1+r)^t-1}/r) PV perpetuity=C/r (eg. Preferred stock) r=Dividend/ price per share Growing annuity PV=C*{(1-((1+g)/(1+r))^t)/(r-g)} Growing perpetuity PV=C/(r-g) EAR={1+(Quoted rate/m)}^m – 1 or Eff( Nom APR, # periods) Continuous Compounding: EAR=e^q -1 APR: Nom(Eff, # periods) =Interest rate per period* # or periods per year Irr(Yr0 CF or pv, {CF1,CF2,,,CFN}) to calculate interest with uneven cash flow Loan types: Pure Discount loan (The borrower receives money today and repays a single lump sum at some time in the future).TVM solver Treasury Bills (The government borrows money on a short-term basis by selling Treasury bills, or T-bills and pay a fixed amount at some time). TVM solver Interest-only Loans (borrower pays interest each period and pays the entire principle at one point in the future). Yr1-Y(n-1)=C*r, Yn=C*r+C Amortized Loan (Borrower replays parts of the loan amount over time). TVM solver

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Finance test 2 cheat sheet - Future value of multiple cash...

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