1. OUTLINE
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Chapter 3
How do we determine the value of money at any given time?
We need to know the interest rate and the appropriate formula. This chapter has all those formulas

2. CHAPTER 3 FORMULAS

3. CHAPTER 3 FORMULAS (CONTINUED)

4. Derivations
DERIVATION OF SOME FORMULAS
SINGLE CASH FLOW
UNIFORM SERIES OF PAYMENTS
LINEAR GRADIENT SERIES
GEOMETRIC GRADIENT SERIES
IRREGULAR SERIES
GO OVER REMAINING CHAPTER 3 EXAMPLES

5. Formulas
F – future value
P – present value
N – number of periods
i – interest rate per period
A – payment at the end of each period
G – increase in payment per period starting in the second
A1 – Initial payment
n – Index for periods
g –percentage change from payment to payment

6. Formulas – Future value, Present value

7. Formulas – Payments –the last term in 7) should be raised to N-1

8. Formulas – Payments (continued)

9. Formulas – Gradient Series

10. Formulas -- Geometric Gradient Series

11. Formulas -- Geometric Gradient (continued)

12. Formulas -- Geometric Gradient (continued)

13. Tables

16. Equivalence at any point in time

18. Example solution

20. 3.25

21. 3.26

22. 3.26

23. 3.26

24. Example 3.27

25. 3.27 – cash flows

26. 3.27 – part a)

27. 3.27 part b)

28. 3.27 part b)

29. 3.27 part b)

30. 3.27 part b)