Reference no: EM131016013
Time Value of Money
(I need help explaining the following and/or demonstrating it for my upcoming exam if anyone could help me comprehend the concepts I would greatly appreciate it!!)
- Explain the basic economic premise behind time value of money (dollar today > dollar tomorrow)
- Calculate, interpret, and explain the following types of time value of money calculations:
- Solve for PV, IR, N, or FV in situations involving lump sums either compounding or discounting
- Solve for PV, IR, N, FV, or PMT in situations involving equal payments (annuities)
- Solve multi-staged time value of money situations
- Solve when the compounding period is more frequent than annual (i.e. monthly or quarterly)
- Describe the difference between an ordinary annuity and an annuity due and calculate each
- Solve for PV, IR, N, and FV in situations involving uneven cash flows
- Use the Equivalent Annual Rate (EAR) formula to find the EAR given a nominal rate
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Basic economic premise behind time value of money
: Explain the basic economic premise behind time value of money (dollar today > dollar tomorrow) - Calculate, interpret, and explain the following types of time value of money calculations:- Solve for PV, IR, N, or FV in situations involving lump sums ..
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