# wk3 - (1+r)-t)/r FV= (1+r)k C((1+r)t-1)/r Perpetuities PV...

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W e e k 3 T u o ri a E m i l y L o

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M e a s u ri n g V a u e What you need to know Cash flow amount Inflows(+) Outflows(-) Timing of Cash flow (t) Riskiness of Cash flow Interest rate (r) Time Value of Money?
T y p e s o C a s h F o w s Single Period Cash Flows One off Cash Flow Simple Interest FV = PV(1+r)*t Compound Interest FV = PV(1+r)t FV = PV(FVIF)

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Multiperiod Cash Flow Annuities Present Value Future Value Ordinary Annuities PV = C(1- (1+r)-t)/r FV = C ((1+r)t-1)/r Annuities Due PV=C(1+r)(1- (1+r)- t)/r FV = C (1+r) ((1+r)t-1)/r Deferred Annuities PV=(1+r)-k C(1-
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Unformatted text preview: (1+r)-t)/r FV= (1+r)k C((1+r)t-1)/r Perpetuities PV =C/r N.A Growing Perpetuitie s PV = C/ (r-g) N.A Uneven Cash n e r e s R a e s Nominal Interest Rate (inom) Quoted rate by financial institutions hard to compare, different compounding period per year Effective Annual Rate (EFF) rate that would generate the same FV if annual compounding had been used Periodic Interest Rate (iPer) rate charged by a lender in each period...
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## This note was uploaded on 01/09/2012 for the course FINS 1613 taught by Professor Drkhshim during the Three '10 term at University of New South Wales.

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wk3 - (1+r)-t)/r FV= (1+r)k C((1+r)t-1)/r Perpetuities PV...

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