暨南大学管理学院财务学管理课件Chapter 3 The Time Value of Money.ppt

Then discount this single sum back to time 0. PV: End mode; P/YR = 1; I = 20; N = 3; FV = 119,624; Solve: PV = $69,226 119,624 0 1 2 3 4 5 6 7 8 $0 0 0 0 40 40 40 40 40 69,226 0 1 2 3 4 5 6 7 8 $0 0 0 0 40 40 40 40 40 119,624 The PV of the cash flow stream is $69,226. 69,226 0 1 2 3 4 5 6 7 8 $0 0 0 0 40 40 40 40 40 119,624 Retirement Example After graduation, you plan to invest $400 per month in the stock market. If you earn 12% per year on your stocks, how much will you have accumulated when you retire in 30 years? Retirement Example After graduation, you plan to invest $400 per month in the stock market. If you earn 12% per year on your stocks, how much will you have accumulated when you retire in 30 years? 0 1 2 3 . . . 360 400 400 400 400 0 1 2 3 . . . 360 400 400 400 400 Using your calculator, P/YR = 12 N = 360 PMT = -400 I%YR = 12 FV = $1,397,985.65 0 1 2 3 . . . 360 400 400 400 400 Retirement Example If you invest $400 at the end of each month for the next 30 years at 12%, how much would you have at the end of year 30? Retirement Example If you invest $400 at the end of each month for the next 30 years at 12%, how much would you have at the end of year 30? Mathematical Solution: Retirement Example If you invest $400 at the end of each month for the next 30 years at 12%, how much would you have at the end of year 30? Mathematical Solution: FV = PMT (FVIFA i, n ) Retirement Example If you invest $400 at the end of each month for the next 30 years at 12%, how much would you have at the end of year 30? Mathematical Solution: FV = PMT (FVIFA i, n ) FV = 400 (FVIFA .01, 360 ) (can’t use FVIFA table) Retirement Example If you invest $400 at the end of each month for the next 30 years at 12%, how much would you have at the end of year 30? Mathematical Solution: FV = PMT (FVIFA i, n ) FV = 400 (FVIFA .01, 360 ) (can’t