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The money returned to the owners of capital for use of their capital. Compound interest is the result of reinvesting interest, rather than paying it out. Quotation of interest rates

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Time value of money

- The document discusses time value of money concepts like present value, future value, rates of return, and compound interest.
- It provides examples of calculating future and present values for lump sums, annuities, and cash flows using different interest rates compounded annually and periodically.
- The key difference between an ordinary annuity and annuity due is whether the first payment is received at the beginning or end of the period.

Time value of money

time value of money
,
concept of time value of money
,
significance of time value of money
,
present value vs future value
,
solve for the present value
,
simple vs compound interest rate
,
nominal vs effective annual interest rates
,
future value of a lump sum
,
solve for the future value
,
present value of a lump sum
,
types of annuity
,
future value of an annuity

Interest and its types

The document discusses different types of interest. It defines interest as a payment made by a borrower to a lender for the use of borrowed money. There are two main types of interest - simple interest, which is calculated only on the original principal amount, and compound interest, which calculates interest on both the principal and previously accumulated interest. The document provides examples to illustrate how to calculate simple interest and compound interest over time. It explains that compound interest results in higher total interest paid compared to simple interest due to interest being added to the principal each compounding period.

Compounding - Future Value of Money

This document discusses the concept of compounding in finance. It defines compounding as the process of earning interest on interest over multiple periods of time. The document outlines tools for calculating the future value of single and multiple cash flows using compound interest formulas. These include formulas for determining the future value of a lump sum, annuities with regular payments, and sinking funds. The document also explores how the frequency of compounding affects interest earned, with more frequent compounding resulting in higher returns.

Chapter 2.Time Value of Money ppt

The document discusses time value of money concepts including present value and future value. It explains that money received today is worth more than the same amount in the future due to factors like risk, inflation, and investment opportunities. It provides formulas for simple and compound interest as well as future and present value calculations. Examples are given to demonstrate compound interest, rule of 72, annuities, and amortizing a loan over time.

Time value of money- TVM ( Discouting and Compounding)

- Time value of money is important for financial decisions like capital budgeting, capital structure, and dividends.
- Money has time value because people prefer current consumption to future consumption, money can be reinvested, and inflation decreases future purchasing power.
- Compounding allows money to earn interest on prior interest amounts over time, increasing the future value. Present value calculations discount future cash flows to determine their value today.
- Tables provide compound interest factors to simplify calculations of future and present values for single amounts, series of cash flows, and annuities received or paid periodically.

Time value of money

The time value of money concept holds that money available now is worth more than the same amount in the future due to its potential earning capacity through interest. It impacts business, consumer, and government finance. Compound interest earns interest on interest, providing higher returns over time compared to simple interest which is earned only on the principal. Tables can be used to easily calculate the future or present value of investments, annuities, or perpetuities using the time value of money formulae. Intrayear compounding adjusts calculations for periods less than annually.

Tov

This document discusses time value of money concepts including compounding, discounting, and present/future value calculations. It provides examples of calculating future value over multiple time periods when interest is compounded annually and quarterly. It also discusses effective interest rates for multi-period compounding and provides a simple interest example for calculating accumulated interest over 5 years.

Time value of money

- The document discusses time value of money concepts like present value, future value, rates of return, and compound interest.
- It provides examples of calculating future and present values for lump sums, annuities, and cash flows using different interest rates compounded annually and periodically.
- The key difference between an ordinary annuity and annuity due is whether the first payment is received at the beginning or end of the period.

Time value of money

time value of money
,
concept of time value of money
,
significance of time value of money
,
present value vs future value
,
solve for the present value
,
simple vs compound interest rate
,
nominal vs effective annual interest rates
,
future value of a lump sum
,
solve for the future value
,
present value of a lump sum
,
types of annuity
,
future value of an annuity

Interest and its types

The document discusses different types of interest. It defines interest as a payment made by a borrower to a lender for the use of borrowed money. There are two main types of interest - simple interest, which is calculated only on the original principal amount, and compound interest, which calculates interest on both the principal and previously accumulated interest. The document provides examples to illustrate how to calculate simple interest and compound interest over time. It explains that compound interest results in higher total interest paid compared to simple interest due to interest being added to the principal each compounding period.

Compounding - Future Value of Money

This document discusses the concept of compounding in finance. It defines compounding as the process of earning interest on interest over multiple periods of time. The document outlines tools for calculating the future value of single and multiple cash flows using compound interest formulas. These include formulas for determining the future value of a lump sum, annuities with regular payments, and sinking funds. The document also explores how the frequency of compounding affects interest earned, with more frequent compounding resulting in higher returns.

Chapter 2.Time Value of Money ppt

The document discusses time value of money concepts including present value and future value. It explains that money received today is worth more than the same amount in the future due to factors like risk, inflation, and investment opportunities. It provides formulas for simple and compound interest as well as future and present value calculations. Examples are given to demonstrate compound interest, rule of 72, annuities, and amortizing a loan over time.

Time value of money- TVM ( Discouting and Compounding)

- Time value of money is important for financial decisions like capital budgeting, capital structure, and dividends.
- Money has time value because people prefer current consumption to future consumption, money can be reinvested, and inflation decreases future purchasing power.
- Compounding allows money to earn interest on prior interest amounts over time, increasing the future value. Present value calculations discount future cash flows to determine their value today.
- Tables provide compound interest factors to simplify calculations of future and present values for single amounts, series of cash flows, and annuities received or paid periodically.

Time value of money

The time value of money concept holds that money available now is worth more than the same amount in the future due to its potential earning capacity through interest. It impacts business, consumer, and government finance. Compound interest earns interest on interest, providing higher returns over time compared to simple interest which is earned only on the principal. Tables can be used to easily calculate the future or present value of investments, annuities, or perpetuities using the time value of money formulae. Intrayear compounding adjusts calculations for periods less than annually.

Tov

This document discusses time value of money concepts including compounding, discounting, and present/future value calculations. It provides examples of calculating future value over multiple time periods when interest is compounded annually and quarterly. It also discusses effective interest rates for multi-period compounding and provides a simple interest example for calculating accumulated interest over 5 years.

Time value of money

Time value of money is an important concept in Finance. It is used in the Corporate finance, Financial management and Financial markets etc.

Time value of money

1. The time value of money concept recognizes that money available at present has more value than the same amount in the future due to interest and inflation.
2. Future value calculations determine how much a present sum of money will be worth in the future if invested at a given interest rate over time.
3. Present value calculations determine what the value of a future cash flow would be worth today if discounted at a given interest rate. Both use compound interest formulas.

Transtutors time value of money

Concepts covered:
Concept of Time value of Money
What is Time Line
Concept of Future Value
What is Simple interest and Compound Interest
Using Financial Calculator or Excel functions
What is Present value and Discounting
Finding the discount rate
Finding number of period
Rule of 72

Time value of money

this is a lecture on time value of money which explains the topic time value of money in a very easy and simple way... it also explains some examples on the topic... plus definition of rate of return, real rate of return, inflation premium, nominal interest rate,market risk, maturity risk,liquidity risk,and default risk,

Bonds 2016

- The document discusses bonds, including types of bonds, bond parameters, bond yields, prices, and applications such as computing bond prices and yields.
- It covers topics like coupon bonds, zero coupon bonds, bond yields, prices, the yield curve, and bond pricing applications.
- Examples are provided to demonstrate bond pricing calculations and how to determine yields and prices for different bonds.

Time value of money

The document discusses time value of money concepts including future value, present value, and compounding and discounting techniques. It provides examples of calculating future value using the equation approach (FV=PV(1+i)n) and tabular approach (FV=PV(FVIFi,n)) for annual, semi-annual, quarterly, monthly, and continuous compounding. It also gives an example problem calculating the future value of Tk. 1,000 invested for 3 and 10 years at various interest rates ranging from 10-100% compounded annually, semi-annually, quarterly, monthly, and continuously.

Time Value of Money

This document provides an introduction and overview of a course on introduction to finance. It includes the course title, code, list of group members, lecturer, and covers key concepts related to time value of money including future value, present value, and calculating interest rates. The document contains examples and explanations of how to calculate future value, present value, and solving for interest rates and time periods using timelines and formulas.

القيمة الزمنية للنقود Tvm

This document provides an overview of key concepts related to time value of money including:
- Defined benefit and defined contribution pension plans and how benefits are calculated under each.
- Common retirement account types like 401(k) plans which allow tax-deferred contributions and earnings.
- The core concept that money has a time value because it can be invested and earn returns over time.
- Key time value of money calculations like present value, future value, and determining interest rates or time periods for investments to double in value.
- The differences between simple and compound interest and how compound interest leads to exponential growth.
- How annuities represent a stream of regular cash flows and the calculations

Time Value of Money - Business Finance

What is the 'Time Value of Money - TVM'
The time value of money (TVM) is the idea that money available at the present time is worth more than the same amount in the future due to its potential earning capacity. This core principle of finance holds that, provided money can earn interest, any amount of money is worth more the sooner it is received. TVM is also referred to as present discounted value.
BREAKING DOWN 'Time Value of Money - TVM'
Money deposited in a savings account earns a certain interest rate. Rational investors prefer to receive money today rather than the same amount of money in the future because of money's potential to grow in value over a given period of time. Money earning an interest rate is said to be compounding in value.
BREAKING DOWN 'Compound Interest'
Compound Interest Formula
Compound interest is calculated by multiplying the principal amount by one plus the annual interest rate raised to the number of compound periods minus one.The total initial amount of the loan is then subtracted from the resulting value.

Bonds part 2

Used with my Principles of Finance course at University of Nebraska
http://www.raik381h.com/index.html

Present value

There are three main reasons why a dollar in the future is worth less than a dollar today:
1. People prefer present consumption over future consumption
2. Inflation decreases the value of currency over time
3. Uncertainty associated with future cash flows decreases their value
The discount rate incorporates these factors and is used to discount future cash flows to their present value. A higher discount rate leads to a lower present value for future cash flows. Discounting future cash flows converts them to present value dollars.

Time Value of Money

This document discusses the time value of money (TVM), which refers to how the value of money changes over time based on factors like inflation and interest rates. TVM can be calculated using formulas, tables, spreadsheets or financial calculators. It has many applications in business and finance, such as capital budgeting, bond valuation, loan payments, and retirement planning. TVM involves determining the present or future value of cash flows given inputs like the rate of return, time period, and frequency or timing of payments.

Rates part 1

This document discusses interest rates, including simple interest rates, compound interest rates with annual and periodic compounding, and continuous compounding. It also covers topics like present and future values, inflation adjustments, and uses of interest rates for things like bonds, mortgages, and consumer rates. Worked examples are provided for calculations involving simple interest, annual compounding, periodic compounding, and continuous compounding.

Time value of money

This document provides an overview of time value of money concepts. It discusses that the value of money decreases over time, so money received today is worth more than the same amount in the future. There are four reasons for an individual's time preference for money: investment opportunities, risk, personal consumption preference, and inflation. The document then describes techniques for adjusting cash flows for time value, including compounding and discounting. It provides examples of simple and compound interest calculations. Finally, it discusses concepts such as present value, perpetuities, and effective interest rates.

Time value of money

Time Value of Money, calculation of Interest both with simple and compound rates, PV value, FV value,

time value of money

The document discusses the time value of money concept. It states that time value of money refers to money received today being more valuable than the same amount received in the future. It also underpins the concept of interest. The document then provides techniques for adjusting cash flows for time value of money using discounting and compounding. It explains discounting as calculating the present value and compounding as calculating the future value of cash flows. Specific formulas and examples are given for single cash flows, annuities, and perpetuities under both discounting and compounding.

GSB711-Lecture-Note-03-The-Time-Value-of-Money

This is the third presentation for the University of New England Graduate School of Business unit GSB711 - Managerial Finance. It explores the time value of money, using examples to help students clarify this concept.

Time value of money with simple sums

TVM, Future Value Interest Factor (FVIF), Present Value Interest Factor (PVIF), present value interest factor of an annuity (PVIFA)
Using estimated rates of return, you can compare the value of the annuity payments to the lump sum.
The present value interest factor may only be calculated if the annuity payments are for a predetermined amount spanning a predetermined range of time.
Time Value of Money Formula
FV = PV x [ 1 + (i / n) ] (n x t)
Formula for Future Value Interest factor:
FVIF = (1+r)n
Formula for PVIF
PVIF = 1 / (1 + r)n

Time value of money (TVM)

This document discusses the concept of time value of money, which is important in financial management. It defines present value and future value, and provides formulas and examples to calculate future value based on the present value, interest rate, and number of periods. Benefits of understanding time value of money include analyzing investment alternatives and business activities involving loans, mortgages, savings, and annuities. Sample problems demonstrate calculating present value and future value using formulas and tables.

Time value of money

The document discusses the concept of time value of money. It states that money received today is worth more than the same amount received in the future, for a few key reasons: inflation decreases purchasing power over time, interest can be earned on money received today, and human preferences favor immediate consumption over future consumption. It provides formulas for calculating future and present value using compound interest, and defines net present value as the difference between the present value of all cash inflows and outflows of an investment project.

L3 - With Answers.pdf

This document discusses key concepts related to engineering economics, including capital, interest, cash flow diagrams, present worth, future value, nominal interest rates, effective interest rates, and simple vs compound interest. It provides examples and formulas for calculating future value, present worth, nominal interest rates, and effective interest rates. The key points are:
- Interest rates are used to determine the time value of money and allow economic comparisons of cash flows over different time periods.
- Compound interest accounts for interest earned on both the principal amount and previously accumulated interest.
- More frequent compounding results in a higher effective interest rate than the nominal annual rate.
- Present worth and future value formulas allow determining the equivalent value

Time Value of Money

Timeline, time value of money, simple interest rate, compound interest rate, annuities, perpetuities, loan amortization, uneven cash flow stream

Time value of money

Time value of money is an important concept in Finance. It is used in the Corporate finance, Financial management and Financial markets etc.

Time value of money

1. The time value of money concept recognizes that money available at present has more value than the same amount in the future due to interest and inflation.
2. Future value calculations determine how much a present sum of money will be worth in the future if invested at a given interest rate over time.
3. Present value calculations determine what the value of a future cash flow would be worth today if discounted at a given interest rate. Both use compound interest formulas.

Transtutors time value of money

Concepts covered:
Concept of Time value of Money
What is Time Line
Concept of Future Value
What is Simple interest and Compound Interest
Using Financial Calculator or Excel functions
What is Present value and Discounting
Finding the discount rate
Finding number of period
Rule of 72

Time value of money

this is a lecture on time value of money which explains the topic time value of money in a very easy and simple way... it also explains some examples on the topic... plus definition of rate of return, real rate of return, inflation premium, nominal interest rate,market risk, maturity risk,liquidity risk,and default risk,

Bonds 2016

- The document discusses bonds, including types of bonds, bond parameters, bond yields, prices, and applications such as computing bond prices and yields.
- It covers topics like coupon bonds, zero coupon bonds, bond yields, prices, the yield curve, and bond pricing applications.
- Examples are provided to demonstrate bond pricing calculations and how to determine yields and prices for different bonds.

Time value of money

The document discusses time value of money concepts including future value, present value, and compounding and discounting techniques. It provides examples of calculating future value using the equation approach (FV=PV(1+i)n) and tabular approach (FV=PV(FVIFi,n)) for annual, semi-annual, quarterly, monthly, and continuous compounding. It also gives an example problem calculating the future value of Tk. 1,000 invested for 3 and 10 years at various interest rates ranging from 10-100% compounded annually, semi-annually, quarterly, monthly, and continuously.

Time Value of Money

This document provides an introduction and overview of a course on introduction to finance. It includes the course title, code, list of group members, lecturer, and covers key concepts related to time value of money including future value, present value, and calculating interest rates. The document contains examples and explanations of how to calculate future value, present value, and solving for interest rates and time periods using timelines and formulas.

القيمة الزمنية للنقود Tvm

This document provides an overview of key concepts related to time value of money including:
- Defined benefit and defined contribution pension plans and how benefits are calculated under each.
- Common retirement account types like 401(k) plans which allow tax-deferred contributions and earnings.
- The core concept that money has a time value because it can be invested and earn returns over time.
- Key time value of money calculations like present value, future value, and determining interest rates or time periods for investments to double in value.
- The differences between simple and compound interest and how compound interest leads to exponential growth.
- How annuities represent a stream of regular cash flows and the calculations

Time Value of Money - Business Finance

What is the 'Time Value of Money - TVM'
The time value of money (TVM) is the idea that money available at the present time is worth more than the same amount in the future due to its potential earning capacity. This core principle of finance holds that, provided money can earn interest, any amount of money is worth more the sooner it is received. TVM is also referred to as present discounted value.
BREAKING DOWN 'Time Value of Money - TVM'
Money deposited in a savings account earns a certain interest rate. Rational investors prefer to receive money today rather than the same amount of money in the future because of money's potential to grow in value over a given period of time. Money earning an interest rate is said to be compounding in value.
BREAKING DOWN 'Compound Interest'
Compound Interest Formula
Compound interest is calculated by multiplying the principal amount by one plus the annual interest rate raised to the number of compound periods minus one.The total initial amount of the loan is then subtracted from the resulting value.

Bonds part 2

Used with my Principles of Finance course at University of Nebraska
http://www.raik381h.com/index.html

Present value

There are three main reasons why a dollar in the future is worth less than a dollar today:
1. People prefer present consumption over future consumption
2. Inflation decreases the value of currency over time
3. Uncertainty associated with future cash flows decreases their value
The discount rate incorporates these factors and is used to discount future cash flows to their present value. A higher discount rate leads to a lower present value for future cash flows. Discounting future cash flows converts them to present value dollars.

Time Value of Money

This document discusses the time value of money (TVM), which refers to how the value of money changes over time based on factors like inflation and interest rates. TVM can be calculated using formulas, tables, spreadsheets or financial calculators. It has many applications in business and finance, such as capital budgeting, bond valuation, loan payments, and retirement planning. TVM involves determining the present or future value of cash flows given inputs like the rate of return, time period, and frequency or timing of payments.

Rates part 1

This document discusses interest rates, including simple interest rates, compound interest rates with annual and periodic compounding, and continuous compounding. It also covers topics like present and future values, inflation adjustments, and uses of interest rates for things like bonds, mortgages, and consumer rates. Worked examples are provided for calculations involving simple interest, annual compounding, periodic compounding, and continuous compounding.

Time value of money

This document provides an overview of time value of money concepts. It discusses that the value of money decreases over time, so money received today is worth more than the same amount in the future. There are four reasons for an individual's time preference for money: investment opportunities, risk, personal consumption preference, and inflation. The document then describes techniques for adjusting cash flows for time value, including compounding and discounting. It provides examples of simple and compound interest calculations. Finally, it discusses concepts such as present value, perpetuities, and effective interest rates.

Time value of money

Time Value of Money, calculation of Interest both with simple and compound rates, PV value, FV value,

time value of money

The document discusses the time value of money concept. It states that time value of money refers to money received today being more valuable than the same amount received in the future. It also underpins the concept of interest. The document then provides techniques for adjusting cash flows for time value of money using discounting and compounding. It explains discounting as calculating the present value and compounding as calculating the future value of cash flows. Specific formulas and examples are given for single cash flows, annuities, and perpetuities under both discounting and compounding.

GSB711-Lecture-Note-03-The-Time-Value-of-Money

This is the third presentation for the University of New England Graduate School of Business unit GSB711 - Managerial Finance. It explores the time value of money, using examples to help students clarify this concept.

Time value of money with simple sums

TVM, Future Value Interest Factor (FVIF), Present Value Interest Factor (PVIF), present value interest factor of an annuity (PVIFA)
Using estimated rates of return, you can compare the value of the annuity payments to the lump sum.
The present value interest factor may only be calculated if the annuity payments are for a predetermined amount spanning a predetermined range of time.
Time Value of Money Formula
FV = PV x [ 1 + (i / n) ] (n x t)
Formula for Future Value Interest factor:
FVIF = (1+r)n
Formula for PVIF
PVIF = 1 / (1 + r)n

Time value of money (TVM)

This document discusses the concept of time value of money, which is important in financial management. It defines present value and future value, and provides formulas and examples to calculate future value based on the present value, interest rate, and number of periods. Benefits of understanding time value of money include analyzing investment alternatives and business activities involving loans, mortgages, savings, and annuities. Sample problems demonstrate calculating present value and future value using formulas and tables.

Time value of money

The document discusses the concept of time value of money. It states that money received today is worth more than the same amount received in the future, for a few key reasons: inflation decreases purchasing power over time, interest can be earned on money received today, and human preferences favor immediate consumption over future consumption. It provides formulas for calculating future and present value using compound interest, and defines net present value as the difference between the present value of all cash inflows and outflows of an investment project.

Time value of money

Time value of money

Time value of money

Time value of money

Transtutors time value of money

Transtutors time value of money

Time value of money

Time value of money

Bonds 2016

Bonds 2016

Time value of money

Time value of money

Time Value of Money

Time Value of Money

القيمة الزمنية للنقود Tvm

القيمة الزمنية للنقود Tvm

Time Value of Money - Business Finance

Time Value of Money - Business Finance

Bonds part 2

Bonds part 2

Present value

Present value

Time Value of Money

Time Value of Money

Rates part 1

Rates part 1

Time value of money

Time value of money

Time value of money

Time value of money

time value of money

time value of money

GSB711-Lecture-Note-03-The-Time-Value-of-Money

GSB711-Lecture-Note-03-The-Time-Value-of-Money

Time value of money with simple sums

Time value of money with simple sums

Time value of money (TVM)

Time value of money (TVM)

Time value of money

Time value of money

L3 - With Answers.pdf

This document discusses key concepts related to engineering economics, including capital, interest, cash flow diagrams, present worth, future value, nominal interest rates, effective interest rates, and simple vs compound interest. It provides examples and formulas for calculating future value, present worth, nominal interest rates, and effective interest rates. The key points are:
- Interest rates are used to determine the time value of money and allow economic comparisons of cash flows over different time periods.
- Compound interest accounts for interest earned on both the principal amount and previously accumulated interest.
- More frequent compounding results in a higher effective interest rate than the nominal annual rate.
- Present worth and future value formulas allow determining the equivalent value

Time Value of Money

Timeline, time value of money, simple interest rate, compound interest rate, annuities, perpetuities, loan amortization, uneven cash flow stream

Simple and Compound Interest.pptx

- Interest is a charge for borrowing money or compensation for lending money. It is calculated as a percentage of the principal amount over a period of time.
- There are two main methods for calculating interest: simple interest and compound interest. Simple interest is calculated only on the principal amount, while compound interest is calculated on the principal plus previously accumulated interest.
- Compound interest results in a higher total interest amount than simple interest since interest is earned on interest over multiple periods. Tables of future values can also be used to quickly calculate compound interest and amounts over time for a given principal, interest rate, and time period.

Comparison of Simple and Compound Interest.ppt

Simple and Compound interest as applicable in finance, taking loans mortgage etc and the overall effect on total payout, a comparison to help make better choices in long term incuding total payout and monthly burden

Actuarial Statistics

The document discusses various actuarial statistics concepts in 10 sections:
1. It defines the difference between simple and compound interest, and provides a table comparing key aspects.
2. It presents the formula for calculating the present value of an annuity.
3. It provides an example problem calculating the value of a college fund after making monthly deposits over 10 years.
4. It defines a sinking fund as periodic payments designed to produce a given sum in the future, such as to pay off a loan.
5. It continues with additional concepts including cash flow, simple vs compound interest calculations, and repayment of loans.
6. It discusses the relationship between effective and nominal interest rates.

Time value Ch6.pdf

An amortization schedule shows how the payments on a loan are applied over time. It breaks down the portions of the payment that go toward interest and principal. As the balance declines with each payment, so does the amount of interest charged. Constructing an amortization schedule involves calculating interest, principal repayment, and ending balance amounts for each payment period until the loan is paid off. Amortization tables are useful for understanding the full cost of loans and how borrowing funds works over the life of the debt.

Time Value of Money.pptx .

The document discusses the time value of money concepts in engineering economics. It defines key terms like interest, simple interest, compound interest and cash flow diagrams.
It explains that money has time value because it can earn more money over time through interest (earning power) and its purchasing power changes with inflation. Time value of money is measured using interest rates. Interest is the cost of borrowing money for the borrower and the earnings for the lender.
It then discusses simple interest and compound interest calculations. Finally, it describes how to construct cash flow diagrams by defining the time frame, establishing periods on the horizontal axis, and plotting cash inflows and outflows. It provides examples of drawing cash flow diagrams for different scenarios.

Lecture 4 tvm

The document summarizes key concepts related to time value of money including:
1) Money today is worth more than money in the future due to factors like interest rates and inflation.
2) Compound interest means interest is earned on both the principal amount and any previous interest earned.
3) Present value calculations determine the current worth of future cash flows while future value calculates the future worth of present cash flows.
4) Annuities represent a stream of regular payments and their present and future values can be calculated using standard formulas.

Business finance time value of money

Time value of money is a financial concept that explains that money available at the present time is worth more than the same amount in the future due to its potential to earn interest or grow in value. There are five key variables in time value of money calculations: present value, future value, number of periods, interest rate, and payment amount. The time value of money draws from the idea that rational investors prefer receiving money today rather than in the future because it provides more utility and opportunity to earn additional value through interest or returns.

(Week 3)

The document discusses interest and economic equivalence. It provides examples and formulas for calculating simple interest, including examples of calculating interest earned on investments and interest paid on loans. It also discusses establishing economic equivalence between cash flows of different amounts that have the same economic value when discounted at an appropriate interest rate. For example, depositing $2,042 today at 8% interest would be equivalent to having $3,000 in 5 years.

4th Lecture- discounted cash flows (1).pptx

This document provides an overview of discounted cash flow valuation concepts including time value of money, compounding and discounting rates, and calculations for present and future value of single and multiple cash flows. Key points covered include:
- Calculating future and present value of single cash flows
- Differences between simple and compound interest
- Effective annual rates for different compounding periods
- Formulas and examples for perpetuities, growing perpetuities, and ordinary annuities
- Learning objectives are to understand time value concepts and perform cash flow calculations for valuation

What is Financial Management - Short notes

This document defines key concepts in financial management and finance. It discusses what finance and management are, and defines financial management as the efficient management of an organization's funds to achieve its objectives. It then explains concepts like the time value of money, future and present value, discounted cash flows, annuities, bonds, risk and return, diversification, and portfolios. Key points covered include how to calculate future and present value, the difference between simple and compound interest, how risk relates to expected return, and how diversification can help reduce unsystematic risk.

BASIC LONG-TERM FINANCIAL CONCEPTS.pptx

This document provides an overview of basic long-term financial concepts including compound and simple interest, present and future value of money, annuities, loan amortization, net present value, and risk-return tradeoff. Examples are provided to demonstrate calculations for interest, present and future value, annuities, loan payments, and net present value analysis. The key relationships between risk and return are explained.

Interés compuesto.

This document provides an introduction to compound interest, including definitions, concepts, and examples. It defines simple interest as interest where the capital amount remains unchanged, while in compound interest, interest earns additional interest in subsequent periods as it is added to the original capital. The document explains key terms like capitalization period and interest rate. It presents the compound interest formula and provides examples of using it to calculate accumulated amounts over time at different interest rates and periods. It concludes with exercises for students to practice calculations.

Lesson: Amortization and Sinking Fund.ppt

This document discusses amortization and sinking funds for repaying loans. Amortization involves making regular installment payments that divide each payment into interest and principal portions, with the outstanding principal decreasing with each payment. A sinking fund allows keeping the loan principal constant while accumulating a separate fund with deposits and interest to repay the principal in a lump sum later. Examples are provided for calculating payment amounts under each method. Yield rates equalize the value of payment streams for investors.

FIN202_FMS-1.pptx

The document discusses the time value of money, including concepts like present value, future value, and compounding interest. It provides formulas for calculating future value, present value, simple interest and compound interest. Examples are given to demonstrate how to use the formulas and concepts to calculate things like interest earned over time, the future value of an investment, and the present value of a future cash flow.

Maths Banking Easy ppt

This document provides an overview of key banking concepts including:
- Banking involves protecting money for others through lending and generating interest for profits.
- Loans generate interest that borrowers must pay back to the bank over time. There are different types of interest calculations like simple and compound interest.
- Cash flow tracks money flowing in and out of a bank over a period of time through credits and debits.
- Financial statement analysis uses ratios to evaluate a company's financial health before approving loans.
- Graphs like bar charts and pie charts help visualize banking data to facilitate analysis.

Chapter 5 Mathematics of Finance and Optimization.pdf

The document discusses various types of interest and investments. It defines interest as the "rent" paid by a borrower to a lender for borrowing money. There are different types of interest rates including fixed, variable, and annual percentage rate (APR). Investments are also discussed including bonds, which are written contracts by debtors to repay a principal amount plus periodic interest payments, as demonstrated by an example bond for a school building. Annuities are defined as a series of equal payments made at regular intervals with interest and formulas are provided to calculate future and present value of annuities.

Time value of money

What is time value of money? Annuities, simple interest, compound interests, present value, future value, etc.

El valor del dinero a traves del tiempo.pptx

This document discusses the concept of the value of money over time. It begins by introducing the importance of money for businesses and investment decisions. It then outlines topics that will be covered, including concepts of simple and compound interest, nominal and effective interest rates, and real interest rates. An example is provided to illustrate the calculation of effective annual interest rates from nominal monthly or annual rates. The document emphasizes that the frequency of compounding affects the final value of investments over time.

L3 - With Answers.pdf

L3 - With Answers.pdf

Time Value of Money

Time Value of Money

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Simple and Compound Interest.pptx

Comparison of Simple and Compound Interest.ppt

Comparison of Simple and Compound Interest.ppt

Actuarial Statistics

Actuarial Statistics

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Time value Ch6.pdf

Time Value of Money.pptx .

Time Value of Money.pptx .

Lecture 4 tvm

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Business finance time value of money

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4th Lecture- discounted cash flows (1).pptx

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BASIC LONG-TERM FINANCIAL CONCEPTS.pptx

Interés compuesto.

Interés compuesto.

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Lesson: Amortization and Sinking Fund.ppt

FIN202_FMS-1.pptx

FIN202_FMS-1.pptx

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Maths Banking Easy ppt

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Chapter 5 Mathematics of Finance and Optimization.pdf

Time value of money

Time value of money

El valor del dinero a traves del tiempo.pptx

El valor del dinero a traves del tiempo.pptx

Income tax

Taxes imposed on the earnings of organizations and individuals are income taxes. Marginal tax rate and flat tax rate. Marginal tax rates are harmful to the economy.

Nominal and Effective Interest Rate

Interest Rate that does not include any consideration of compound interest.Continuous compounding. EAIR.

Projects, Investment, Profitability

This document discusses various methods for evaluating project profitability and investment decisions. It describes quantitative measures like return on investment, return on average investment, payback period, net present worth, and internal rate of return. It also discusses qualitative, intangible factors like employee morale, safety, corporate image, and management goals. The document provides definitions and limitations of different profitability measures. It categorizes project types and notes profitability is difficult to define but important for decision making and maximizing returns on investment.

Taxes and InsuranceEngineering point of view

Tax is a mandatory financial charge, Property taxes, Excise taxes, Income taxes. Capital-gains tax is levied on profits made from the sale of capital assets. Self-insurance is a risk management method

Estimation of Fixed Capital Cost

Operating labour, allow one extra man on days. It is unlikely
that one extra man per shift would be needed to operate
this small plant, and one extra per shift would give
a disproportionately high labour cost.

Summary of Production Costs

Evaluation of preliminary industrial design work . Purchase cost of miscellaneous equipment. Total purchase cost of major equipment items .

Purchase Cost of Miscellaneous Equipment

The document outlines various indirect costs associated with purchasing miscellaneous equipment, including design and engineering costs estimated at 20-30% of direct capital costs, contractor's fees of 5-10% of direct capital costs, and a contingency allowance of 5-10% for issues like labor disputes or weather. The total physical plant cost is the sum of direct costs and these indirect costs.

Mass Transfer Equipment Cost

The document summarizes the components and cost factors involved in purchasing plate and packed towers for mass transfer equipment. The purchased cost can be divided into the shell cost, internals cost like trays and packing, and auxiliary costs. The purchased cost is calculated as the bare cost from figures multiplied by a material factor and pressure factor. Figures are provided showing examples of tray types and cross-sectional views of plate and packed towers.

HEAT-TRANSFER EQUIPMENT COSTS

basic information that should be supplied to a fabricator in order to obtain a price estimate or firm quotation on a proposed heat exchanger (Process Information, Mechanical Information)

Gross Profit, Net Profit

Gross profit, net profitper capital investment. Total annual product cost equals the total annual sales.

Manufacturing Costs

Manufacturing costs per capital investment.Manufacturing costs are: Variable production costs, fixed charges, and plant-overhead.
Direct and indirect production cost. Plant overhead costs. Administrative costs. Distribution and marketing costs. Research and development costs

Capital Investment

Capital cost estimate classifications, Chemical industry. Turnover ratio.
Total product are manufacturing cost and general expenses. product costs are calculated on:
daily basis, unit-of-product basis, or, annual basis

Cost Indices for Industrial Application

Cost Indices, change in cost over time. Cost indexes are maintained in areas such as construction, chemical and mechanical industries. Lang’s method , Hand method.

Estimation of Capital Investments

Capital needed to supply the necessary manufacturing and
plant facilities. Estimation of capital investment.
Order-of-magnitude estimates, 6-10th's rule, Price indices,

Production Costs

Cash flow, cash flow diagram and industry. Cost estimation is required to provide reliable decisions.Price fluctuations, company policies, governmental regulations

Location of an industry

Why location is important for installing an industry, factors affecting plant location, Current trends in selection of a pant location

Fluctuation of money value with time

Time value of money is measured by interest rates. Money has time value because it can earn more over time through interest (earning power) and its purchasing power changes with inflation. The present value of a future amount can be calculated using the present value formula, which takes into account the discount rate and number of periods until receipt. As time passes, the value of assets invested in a project will change. Assets are items owned that have future economic benefit and are divided into tangible assets with physical form and intangible assets without physical form.

Economics for Engineers, Why ?

The document discusses engineering economics and its importance for chemical engineers. It provides three key objectives of engineering economics: 1) to assess the appropriateness of a given project, 2) to estimate its value, and 3) to justify it from an engineering standpoint. The document then analyzes several potential reaction processes for producing vinyl chloride and calculates the gross profit that could be made from each based on raw material and product prices. Reaction 3, which converts ethylene and chlorine into vinyl chloride and hydrogen chloride, is identified as the most profitable option.

Psychrometric chart, How to read

Dew point, Humidity, Dry Bulb temperature, Locate a point on the chart. Enthalpy changes. Tips and tricks for the psychrometric chart.

The Scientific Methods

The scientific method is a set of procedures used to develop explanations of natural phenomena and possibly to predict additional phenomena. For example,
The average temperature of seawater increases, the seawater will become less dense, its volume will increase, and sea level will rise even if no continental ice melts.

Income tax

Income tax

Nominal and Effective Interest Rate

Nominal and Effective Interest Rate

Projects, Investment, Profitability

Projects, Investment, Profitability

Taxes and InsuranceEngineering point of view

Taxes and InsuranceEngineering point of view

Estimation of Fixed Capital Cost

Estimation of Fixed Capital Cost

Summary of Production Costs

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Purchase Cost of Miscellaneous Equipment

Purchase Cost of Miscellaneous Equipment

Mass Transfer Equipment Cost

Mass Transfer Equipment Cost

HEAT-TRANSFER EQUIPMENT COSTS

HEAT-TRANSFER EQUIPMENT COSTS

Gross Profit, Net Profit

Gross Profit, Net Profit

Manufacturing Costs

Manufacturing Costs

Capital Investment

Capital Investment

Cost Indices for Industrial Application

Cost Indices for Industrial Application

Estimation of Capital Investments

Estimation of Capital Investments

Production Costs

Production Costs

Location of an industry

Location of an industry

Fluctuation of money value with time

Fluctuation of money value with time

Economics for Engineers, Why ?

Economics for Engineers, Why ?

Psychrometric chart, How to read

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The Scientific Methods

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LAND USE LAND COVER AND NDVI OF MIRZAPUR DISTRICT, UP

This Dissertation explores the particular circumstances of Mirzapur, a region located in the
core of India. Mirzapur, with its varied terrains and abundant biodiversity, offers an optimal
environment for investigating the changes in vegetation cover dynamics. Our study utilizes
advanced technologies such as GIS (Geographic Information Systems) and Remote sensing to
analyze the transformations that have taken place over the course of a decade.
The complex relationship between human activities and the environment has been the focus
of extensive research and worry. As the global community grapples with swift urbanization,
population expansion, and economic progress, the effects on natural ecosystems are becoming
more evident. A crucial element of this impact is the alteration of vegetation cover, which plays a
significant role in maintaining the ecological equilibrium of our planet.Land serves as the foundation for all human activities and provides the necessary materials for
these activities. As the most crucial natural resource, its utilization by humans results in different
'Land uses,' which are determined by both human activities and the physical characteristics of the
land.
The utilization of land is impacted by human needs and environmental factors. In countries
like India, rapid population growth and the emphasis on extensive resource exploitation can lead
to significant land degradation, adversely affecting the region's land cover.
Therefore, human intervention has significantly influenced land use patterns over many
centuries, evolving its structure over time and space. In the present era, these changes have
accelerated due to factors such as agriculture and urbanization. Information regarding land use and
cover is essential for various planning and management tasks related to the Earth's surface,
providing crucial environmental data for scientific, resource management, policy purposes, and
diverse human activities.
Accurate understanding of land use and cover is imperative for the development planning
of any area. Consequently, a wide range of professionals, including earth system scientists, land
and water managers, and urban planners, are interested in obtaining data on land use and cover
changes, conversion trends, and other related patterns. The spatial dimensions of land use and
cover support policymakers and scientists in making well-informed decisions, as alterations in
these patterns indicate shifts in economic and social conditions. Monitoring such changes with the
help of Advanced technologies like Remote Sensing and Geographic Information Systems is
crucial for coordinated efforts across different administrative levels. Advanced technologies like
Remote Sensing and Geographic Information Systems
9
Changes in vegetation cover refer to variations in the distribution, composition, and overall
structure of plant communities across different temporal and spatial scales. These changes can
occur natural.

math operations ued in python and all used

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Best for u

Level 3 NCEA - NZ: A Nation In the Making 1872 - 1900 SML.ppt

The History of NZ 1870-1900.
Making of a Nation.
From the NZ Wars to Liberals,
Richard Seddon, George Grey,
Social Laboratory, New Zealand,
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A Visual Guide to 1 Samuel | A Tale of Two Hearts

These slides walk through the story of 1 Samuel. Samuel is the last judge of Israel. The people reject God and want a king. Saul is anointed as the first king, but he is not a good king. David, the shepherd boy is anointed and Saul is envious of him. David shows honor while Saul continues to self destruct.

Philippine Edukasyong Pantahanan at Pangkabuhayan (EPP) Curriculum

(𝐓𝐋𝐄 𝟏𝟎𝟎) (𝐋𝐞𝐬𝐬𝐨𝐧 𝟏)-𝐏𝐫𝐞𝐥𝐢𝐦𝐬
𝐃𝐢𝐬𝐜𝐮𝐬𝐬 𝐭𝐡𝐞 𝐄𝐏𝐏 𝐂𝐮𝐫𝐫𝐢𝐜𝐮𝐥𝐮𝐦 𝐢𝐧 𝐭𝐡𝐞 𝐏𝐡𝐢𝐥𝐢𝐩𝐩𝐢𝐧𝐞𝐬:
- Understand the goals and objectives of the Edukasyong Pantahanan at Pangkabuhayan (EPP) curriculum, recognizing its importance in fostering practical life skills and values among students. Students will also be able to identify the key components and subjects covered, such as agriculture, home economics, industrial arts, and information and communication technology.
𝐄𝐱𝐩𝐥𝐚𝐢𝐧 𝐭𝐡𝐞 𝐍𝐚𝐭𝐮𝐫𝐞 𝐚𝐧𝐝 𝐒𝐜𝐨𝐩𝐞 𝐨𝐟 𝐚𝐧 𝐄𝐧𝐭𝐫𝐞𝐩𝐫𝐞𝐧𝐞𝐮𝐫:
-Define entrepreneurship, distinguishing it from general business activities by emphasizing its focus on innovation, risk-taking, and value creation. Students will describe the characteristics and traits of successful entrepreneurs, including their roles and responsibilities, and discuss the broader economic and social impacts of entrepreneurial activities on both local and global scales.

Standardized tool for Intelligence test.

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Practical manual for National Examination Council, Nigeria.
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Leveraging Generative AI to Drive Nonprofit Innovation

In this webinar, participants learned how to utilize Generative AI to streamline operations and elevate member engagement. Amazon Web Service experts provided a customer specific use cases and dived into low/no-code tools that are quick and easy to deploy through Amazon Web Service (AWS.)

How to Make a Field Mandatory in Odoo 17

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Mule event processing models | MuleSoft Mysore Meetup #47

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Event Link:- https://meetups.mulesoft.com/events/details/mulesoft-mysore-presents-mule-event-processing-models/
Agenda
● What is event processing in MuleSoft?
● Types of event processing models in Mule 4
● Distinction between the reactive, parallel, blocking & non-blocking processing
For Upcoming Meetups Join Mysore Meetup Group - https://meetups.mulesoft.com/mysore/YouTube:- youtube.com/@mulesoftmysore
Mysore WhatsApp group:- https://chat.whatsapp.com/EhqtHtCC75vCAX7gaO842N
Speaker:-
Shivani Yasaswi - https://www.linkedin.com/in/shivaniyasaswi/
Organizers:-
Shubham Chaurasia - https://www.linkedin.com/in/shubhamchaurasia1/
Giridhar Meka - https://www.linkedin.com/in/giridharmeka
Priya Shaw - https://www.linkedin.com/in/priya-shaw

HYPERTENSION - SLIDE SHARE PRESENTATION.

IT WILL BE HELPFULL FOR THE NUSING STUDENTS
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- 1. Interest Why Engineers should know ? Dr. K. Shahzad Baig Memorial University of Newfoundland (MUN) Canada
- 2. Interest “Interest is the money returned to the owners of capital for use of their capital.” “When a person loans money, a charge is made for the use of these borrowed funds.” “The compensation paid for the use of borrowed capital.” The size of the fee will depend upon: i. the scarcity of money, the size of the loan, ii. the length of the loan, iii. the risk the lender feels that the loan may not be paid back, and iv. the prevailing economic conditions.
- 3. Why Engineers should know about interest ? Engineers may be involved in the evaluation of an investment of money in a venture, it is important that they understand the time value of money and how it is applied in the evaluation of projects.
- 4. Types of Interests Principal: The amount of capital on which interest is paid. Rate of interest: The amount of interest earned by a unit of principal in a unit of time. The time unit is usually taken as one year.
- 5. Simple Interest This form of interest requires compensation payment at a constant interest rate based only on the original principal. If P represents the principal, N the number of time units or interest periods, and i the interest rate based on the length of one interest period, the amount of simple interest I during N interest periods is I=P i N The principal must be repaid eventually; therefore, the entire amount of principal plus simple interest due after N interest periods is F= P+I= P (1+i N )
- 6. Problem Statement An initial loan of $1000 at an annual interest rate of 10 percent would require payment of $100 as interest at the end of the first year. If this payment were not made, the interest for the second year would be ? The total compound amount due after 2 years would be ? The interest for the second year = = ($1000 + $100X0.10) = $110 The total compound amount due after 2 years = = $1000 + $100 + $110 = $1210
- 7. Problem Statement Rs. 100,000 was deposited in a bank account and Rs115,000 is withdrawn one year later. Compute a) the interest received from the Rs100,000 investment, and b) the annual interest rate which was paid a) I = Rs. 115,000 – Rs. 100,000 = Rs. 15,000 𝑖 = 15,000/𝑦𝑟 100,000 𝑥 100% = 15% 𝑝𝑒𝑟 𝑦𝑒𝑎𝑟
- 8. Compound interest It is the interest calculated on the initial principal and also on the accumulated interest of previous periods of a deposit or loan, in other words, interest on interest. Compound interest is the result of reinvesting interest, rather than paying it out, so that interest in the next period is then on the principal sum plus previously accumulated interest. 𝐹 = 𝑃 1 + 𝑖 𝑁 F = The total amount of money accumulated P = Present Value of Money i = interest rate n = Number of interest periods
- 9. Problem Statement • At a 10% per year interest rate, how much is $500 now equivalent to three years from now? • $500 now will increase 10% in each on the three years Now End of 1st yr End of 2nd yr End of 3rd yr $500 500+ 10% (500) 550 + 10% (550) 605 + 10 % (605) 550.00 605.00 665.50 The $500 now is equivalent to $665.50 at the end of 3 years.
- 10. The time standard for interest computations – One Year • One Year: Can be segmented into: – 365 days – 52 Weeks – 12 Months – One quarter: 3 months – 4 quarters/year • Interest can be computed more frequently than one time a year Common Compounding Frequencies
- 11. Quotation of Interest Rates Interest rates can be quoted in more than one way. • Example: – Interest equals “5% per 6-months” – Interest is “12%” (12% per what?) – Interest is 1% per month – “Interest is “12.5% per year, compounded monthly” • Thus, one must “decipher the various ways to state interest Two types of interest quotation – 1. Quotation using a Nominal Interest Rate – 2. Quoting an Effective Periodic Interest Rate
- 12. Following books were used in preparation of notes Blank, L., Tarquin. A. 2005. Engineering Economy. 6th Edition, McGraw-Hill. Eschenbach, T. G. 2003. Engineering Economy”, 2nd Edition, Oxford University Press Riggs, J. L., Bedworth, D. D., Randhawa, S. U. 1996. Engineering Economics”, 4th Edition, Tata McGraw-Hill. Riggs, J. L., West. T. M. 1986. Essentials of Engineering Economics”, 2nd Edition, McGraw-Hill. Peter, M. S., Timmerhaus, K. D. 1991. Plant Design and Economics for Chemical Engineers. 4th Edition, McGraw-Hill.