Unformatted text preview: FV = PV(1 + r) t Rearrange to solve for PV = FV / (1 + r) t o When we talk about discounting, we mean finding the present value of some future amount o When we talk about the “value” of something, we are talking about the present value unless it is specifically indicated that we want the future value • Discount Rate o Often, we will want to know what the implied interest rate is in an investment o Rearrange the basic PV equation and solve for r FV = PV(1 + r) t R = (FV/PV) 1/t – 1 • Finding the number of periods o Start with basic equation and solve for t FV = PV(1 + r) t t = ln(FV / PV)/ln(1 + r)...
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 Spring '08
 Polkovnichenko
 Exchange Rate, Time Value Of Money, Future Value, Interest, Interest Rate, basic PV equation

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