BUS 320 Lecture 9: BUS 320 Chapter 9
6 May 2020
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Chapter 9 - the time value of money. Compounding (fv) - what something received today is worth in the future. Discounting (pv) - what something received in the future is worth today. Measuring value of amount allowed to grow at given interest over period of time. Insert pv, make negative, hit pv key. Clear the calculator (orange key, c key) Insert number of periods, hit n key. Sum payable in future worth less than stated amount. Formula for present value derived from original formula for future value. Determine how many years it would take an investment to grow to a certain dollar amount. A series of consecutive payments or receipts of equal amount. Calculated by compounding each individual payment into the future. Orange key - mar - make sure doesn"t say beg. Insert pv amount of loan, hit pv. ** - means inversely related, + means increase/decrease together. Single sum: rate, number of period, pv, fv.
