COMM 2202 Lecture Notes - Lecture 5: Discount Window, Interest Rate, Opportunity Cost
13 Dec 2018
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Chapter 5: introduction to valuation: the time value of money. Lump sum problems: future value (fv, present value (pv, i or r (rate, n time. Interest rate: exchange rate between earlier money and later money. Two ways to calculate the time value of money (tvm: formulas, calculator. Future value interest factor = (1 + r )^t. If you get ,000, you will have to pay back ,276. 28. For a given interest rate, the longer the time period, the lower the present value. For a given time period, the higher the integrate rate, the smaller the present value. Cash in ows are positive and cash out ows are negative. You have to add in the to the pv in order to avoid the error message for the interest rate and the number of periods. Fv = 190,000 n = 9 i = 12.
