1 / 23

Time Value of Money

Time Value of Money. AGEC 489-689 Spring 2010. Page 60 in booklet. Time Value of Money…. Assume it is the year 2009 and you have been given the choice of a single payment of $500 paid to you ten years from now (2019) or a payment of $300 today. Which would you choose?.

Download Presentation

Time Value of Money

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript


  1. Time Value of Money AGEC 489-689 Spring 2010

  2. Page 60 in booklet

  3. Time Value of Money… Assume it is the year 2009 and you have been given the choice of a single payment of $500 paid to you ten years from now (2019) or a payment of $300 today. Which would you choose? 2009 2010 2011 2012 2013 ……. 2019

  4. Page 60 in booklet

  5. Present Value Interest Factor (PIF) Table PIFr,n = (1 + r) -n

  6. I would take the $300 today since it has a higher present value, given my discount rate of 6%, than $500 ten years from now. Page 61 in booklet

  7. Present Value Interest Factor (PIF) Table PIFr,n = (1 + r) -n

  8. Page 61 in booklet

  9. Equal Payment Present Value Interest Factor (EPIF) Table EPIFr,n = [1 – (1 / (1+ r)n)] / r

  10. Equal Payment Present Value Interest Factor (EPIF) Table EPIFr,n = [1 – (1 / (1+ r)n)] / r

  11. Pages 61-62 in booklet

  12. Present Value Interest Factor (PIF) Table PIFr,n = (1 + r) -n

  13. Present Value Interest Factor (PIF) Table PIFr,n = (1 + r) -n

  14. Page 62 in booklet

  15. Page 63 in booklet

  16. Pages 63-64 in booklet

  17. Page 64 in booklet

  18. Equal Payment Present Value Interest Factor (EPIF) Table EPIFr,n = [1 – (1 / (1+ r)n)] / r

  19. Page 64-65 in booklet

  20. Equal Payment Present Value Interest Factor (EPIF) Table EPIFr,n = [1 – (1 / (1+ r)n)] / r

  21. Page 65 in booklet

  22. Know equations 40, 44 and 45 Page 65-66 in booklet

  23. Let’s Work Some Problems

More Related