Summary Ch 5 Time Value of Money - Corporate Finance (COF) (AIF) - Principles of Managerial Finance

Time Value of Money
Chapter Number Chapter 5

Subject COF




Time Value of Money 1

, 📖 Table of Contents

Outline
5.1 The Role of Time Value in Finance
FUTURE VALUE VERSUS PRESENT VALUE
BASIC PATTERNS OF CASH FLOW
Single amount
Annuity
Mixed stream
5.2 Single Amounts
FUTURE VALUE OF A SINGLE AMOUNT
The Concept of Future Value
The Equation for Future Value
PRESENT VALUE OF A SINGLE AMOUNT
The Concept of Present Value
The Equation for Present Value
5.3 Annuities
Ordinary Annuity
Finding the future value of ordinary annuity
Finding the present value of ordinary annuity
Annuity Due
Finding the future value of annuity due
Finding the present value of annuity due
FINDING THE PRESENT VALUE OF A PERPETUITY
5.4 Mixed Streams
FUTURE VALUE OF A MIXED STREAM
PRESENT VALUE OF A MIXED STREAM
5.5 Compounding Interest More Frequently than Annually
EQUATION FOR COMPOUNDING
CONTINUOUS COMPOUNDING
NOMINAL AND EFFECTIVE ANNUAL RATES OF INTEREST
5.6 Special Applications of Time Value
(1) determining deposits needed to accumulate a future sum
(2) loan amortization
(3) finding interest or growth rates
(4) finding an unknown number of periods.




5.1 The Role of Time Value in Finance


Time Value of Money 2