16642 Lecture Notes - Lecture 3: Cash Flow
Document Summary
Contents: present value & future value of multiple cash flows, present value & future value of annuities, accumulation of a future sum, determining yields, or internal rates of return, on investments. Present value of multiple cash flows: an investment is expected to receive a cash flow stream as follows for the next 5 years. Future value of multiple cash flows: an investment is expected to receive a cash flow stream as follows for the next 5 years. A similar risk project is available to you paying 10% interest per year compound annually. Annuity: assume deposits of ,000 are made at the end of each year for a period of five years and interest is compounded at an annual rate of 5%. What is the future value at the end of the period for a series of deposits plus all compound interest: the problem involves equal payments (p) or deposits made at equal time intervals.
