PPT-FA2 Module 5. Interest concepts of future and present valu

Time value of money Basic interest concepts Present and future values Single payment Annuity ordinary and due Applications 1 Time value of money Investors expect that money invested should grow i e earn a return over time The . Compound Interest and Present Value. Copyright © 2014 by The McGraw-Hill Companies, Inc. All rights reserved.. McGraw-Hill/Irwin. Compare simple interest with compound interest.. Calculate the compound amount and interest manually and by table lookup.. Introduction to Valuation: The Time Value of Money. Key Concepts and Skills. Be able to compute the . future value . of an investment made today. Be able to compute the . present value . of cash to be received at some future date. The time value of money. CH 5. I. ntroduction. One of the basic problems faced by the financial manager is how to determine the value . today. of cash flow expected in the . future. .. Time value of money: is refer to the fact that a dollar in hand today is worth more than a dollar promised at some time in the future. The reason for this is that you could earn interest while you waited; so a dollar today would grow to more than a dollar later.. the . Capital Market, . and the Wealth of Nations. Why People Invest. Capital and Investment. Types of . capital. :. physical capital. human capital. Investment. : . the purchase . or development of a capital resource. “I don’t believe in . princerple. , But oh I du in interest.”. James Russell Lowell.  . “My interest is in the future because I am going to . spend the rest of my life there.”. Charles F. Kettering. The time value of money. CH 5. I. ntroduction. One of the basic problems faced by the financial manager is how to determine the value . today. of cash flow expected in the . future. .. Time value of money: is refer to the fact that a dollar in hand today is worth more than a dollar promised at some time in the future. The reason for this is that you could earn interest while you waited; so a dollar today would grow to more than a dollar later.. Copyright © 2014 by The McGraw-Hill Companies, Inc. All rights reserved.. McGraw-Hill/Irwin. Compare simple interest with compound interest.. Calculate the compound amount and interest manually, using algebraic formulas and with a financial calculator.. Motivation. We are in search of a method by which we as either financial managers or investors can make decisions about our investment opportunities. An . investment. is a claim to a stream of cash flows whether they are from real or financial projects. “I don’t believe in . princerple. , But oh I du in interest.”. James Russell Lowell.  . “My interest is in the future because I am going to . spend the rest of my life there.”. Charles F. Kettering. Chapter 3 Understanding and Appreciating the Time Value of Money Professor Payne, Finance 4100 Learning Objectives Explain the mechanics of compounding. Understand the power of time and the importance of the interest rate in compounding. Chapter 5 Formulas Introduction to Valuation: The Time Value of Money McGraw-Hill/Irwin Copyright © 2010 by The McGraw-Hill Companies, Inc. All rights reserved. Key Concepts and Skills Be able to compute the future value of an investment made today Chapter 6 - Time Value of Money Time Value of Money A sum of money in hand today is worth more than the same sum promised with certainty in the future. Think in terms of money in the bank The value today of a sum promised in a year is the amount and the Wealth of Nations. Why People Invest. Capital and Investment. Types of . capital. :. physical capital. human capital. Investment. : . the purchase . or development of a capital resource. Savings. and the Wealth of Nations. Why People Invest. Capital and Investment. Types of . capital. :. physical capital. human capital. Investment. : . the purchase . or development of a capital resource. Savings.