COMM 101 Lecture Notes - Annuity, Initial Public Offering, Stock Market

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20 Feb 2014
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COMM 101 Full Course Notes
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Read: the definition of time value of money from wikipedia: http://en. wikipedia. org/wiki/time_value_of_money: value of money figuring in a given amount of interest earned over a given amount of time. The time value of money is the central concept in finance theory: for example, of today"s money invested for one year and earning 5% interest will be worth after one year. Future value is the value of an asset or cash at a specified date in the future that is equivalent in value to a specified sum today. The present value formula is the core formula for the time value of money; each of the other formulae is derived from this formula. For example, the annuity formula is the sum of a series of present value calculations. million lottery pay out per year for 1 million years, even though chance of winning is high.

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