FormulasChs4_5_Exam2 - EAR = 1 1 m m i(4.23a EAR(continuous...

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F ORMULAS – C HAPTERS 4 AND 5 – B USINESS F INANCE (4.4) n n i PV FV ) 1 ( + × = (4.5) Future value interest factor n n i i FVIF ) 1 ( , + = (4.9) ( 29 ( 29 + × = + = n n n n i FV i FV PV 1 1 1 (4.11) Present value interest factor ( 29 n n i i PVIF + = 1 1 , (4.12) ( 29 n i n PVIF FV PV , × = (4.13) ( 29 1 1 , 1 - = + = t n t n i i FVIFA (4.13a) (footnote) ( 29 [ ] 1 1 1 , - + × = n n i i i FVIFA (4.14) ( 29 n i n FVIFA PMT FVA , × = (4.15) ( 29 = + = n t t n i i PVIFA 1 , 1 1 (4.15a) ( 29 + - × = n n i i i PVIFA 1 1 1 1 , (4.16) ( 29 n i n PVIFA PMT PVA , × = (4.17) FVIFA i,n (annuity due) = FVIFA i,n × (1 + i ) (4.18) PVIFA i,n (annuity due) = PVIFA i,n × (1 + i ) (4.19) PVIFA i,∞ = i 1 (4.20) PV m i FV n m n × + = × 1
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Formulas, Chapters 4 and 5, continued: (4.21) FV n (continuous compounding) = PV × ( e i×n ) (4.22) FVIF n (continuous compounding) = e i×n (4.23)
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Unformatted text preview: EAR = 1 1- + m m i (4.23a) EAR (continuous compounding) = e k-1 (4.25) n i n FVIFA FVA PMT , = (4.26) ( 29 n i n PVIFA PMT PVA , × = (4.27) PMT = n i n PVIFA PVA , (5.1) 1 1---+ = t t t t t P P P C k (5.2) ∑ = × = n j j j Pr k k 1 (5.2a) n k k n j j ∑ = = 1 (5.3) ( 29 ∑ = ×-= n j j j k Pr k k 1 2 σ (5.4) k CV k = (5.6) Total security risk = Nondiversifiable risk + Diversifiable risk (5.8) ( 29 [ ] F m j F j R k b R k-× + = (5.9) R F = k* + IP...
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