BUS 330 Chapter Notes - Chapter 5: Compound Interest, Opportunity Cost, Annual Percentage Yield
27 Mar 2017
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Bus 330 finance | chapter 5: time value of money. Time val of money observation that better to receive 3096$ sooner than later. 3096$ that comes in future < 3096$ spent up front. Future value what amount of money in future is equivalent to a certain amount today: use compounding at end of investment"s life and sum values to find future val. Compare cash flows at either end or beginning of investment"s life. Single amount lump-sum amount currently held or expected at future date i. e. today and received at end of 10 years. Annuity level periodic stream i. e. paying out/receiving at the end of each of next 7yrs. Mixed stream stream of unequal periodic cash flow, no particular patt. Find val at some future date of given amount placed on deposit today and earning interest at specified rate.
