FIN 351- Midterm Exam Guide - Comprehensive Notes for the exam ( 14 pages long!)
Document Summary
Chapter 4 is a lengthy chapter consists of four basic concepts involving the time value of money. Fortunately this is a review for most of you so we may not need to spend as much time on this would introductory course finance. Basic concepts are dollars, how many, how frequently do we pay or get paid, and when. Calculate future value of money, we multiply the amount of money available today by 1+ an interest rate for how many time periods. These time calculations are critical in financial transactions. A dollar received one period from today is obviously less valuable than it would be today, so we need to calculate equilibrium process measure this delay in payment. We can also determine present value of money to be received at sometime in the future. The second part of the chapter pertains to screens of payments some of which may be annuities.
