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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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This note was uploaded on 04/07/2008 for the course BA 3341 taught by Professor Polkovnichenko during the Spring '08 term at University of Texas at Dallas, Richardson.
 Spring '08
 Polkovnichenko
 Exchange Rate, Time Value Of Money, Future Value, Interest, Interest Rate

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