FIN 301 1st Edition Lecture 16 Notes based off of class power points This is the mathematical financial part of finance Be sure to refer back to class power for problems BA 301 The Time Value of Money 2 I II III IV V VI VII VIII Future value of a single payment a Compounding of a single payment to future value Present value of a single payment a Sometime during the period Present value of multiple payments a Multiple time periods b Higher payments associated with it Present Value of a Future Single Payment Investment Using a Financial a Today present value Interpreting present value a The discounting rate is really important in the evaluation process b Interest rates go up existing bond prices goes down Practice with bonds a Inverse relationship between stock and bond values and changes in interest rates Finding the Rate of Return for a Single Investment Calculator a Annuity is a sequence of equal multiple payments that include interest and principle An Annuity is a sequence of equal multiple payments a An annuity pays down to over 0 overtime and has a future value of 0 both interest and principle b Not like a bond These notes represent a detailed interpretation of the professor s lecture GradeBuddy is best used as a supplement to your own notes not as a substitute
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