1. FIRST PRINCIPLES OF VALUATION

2. TIME VALUE OF MONEY: Six Functions of a Dollar
Future Value of a One Time Deposit
Present Value of a Single Future Cash Flow
Future Value of an Annuity
Present Value of an Annuity
Sinking Fund Payment
Payment to Amortize Debt

3. TVM: Future Value of a One Time Deposit with Annual Compounding

4. TVM: Future Value of a One Time Deposit with Annual Compounding HP 10B Keystrokes
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Annual compounding
$1,000 present value
6% annual interest
Two year term
Compute future value

5. TVM: Future Value of a One Time Deposit with Annual Compounding

6. TVM: Future Value of a One Time Deposit with Periodic Compounding

7. TVM: Future Value of a One Time Deposit with Periodic Compounding HP 10B Keystrokes
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Monthly compounding
$1,000 present value
6% annual interest
24 months
Compute future value

8. TVM: Future Value of a One Time Deposit with Periodic Compounding

9. TVM: Quoted Rates vs Effective Annual Rates

10. TVM: Quoted Rates vs Effective Annual Rates

11. TVM: Quoted Rates vs Effective Annual Rates

12. TVM: Quoted Rates vs Effective Annual Rates

13. TVM: Quoted Rates vs Effective Annual Rates HP 10B Keystrokes
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Monthly compounding
6% annual interest
Compute effective rate
Display 4 decimal places

14. TVM: Quoted Rates vs Effective Annual Rates

15. TVM: Quoted Rates vs Effective Annual Rates HP 10B Keystrokes
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Compute e to 0.06 power
Subtract 1
Multiply by 100 to get
the percent.

16. TVM: Quoted Rates vs Effective Annual Rates

17. TVM: Present Value of a Future CF Annual Discounting

18. TVM: Present Value of a Future CF Annual Discounting: HP 10B Keystrokes
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One payment per year
$1,000 future value
CF in two years
8% annual interest
Compute present value

19. TVM: Present Value of a Future CF Annual Discounting

20. TVM: Annuities

21. TVM: Future Value of an Annual Ordinary Annuity

22. TVM: Future Value of an Annual Ordinary Annuity HP 10B Keystrokes
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One payment per year
$1,200 payment/year
6% annual interest
For 3 years
Compute future value

23. TVM: Future Value of an Annual Ordinary Annuity

24. TVM: Future Value of a Periodic Ordinary Annuity

25. TVM: Future Value of a Periodic Ordinary Annuity HP 10B Keystrokes
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Monthly payments
$100 payment/mo.
36 months (3 years)
6% annual interest
Compute future value

26. TVM: Future Value of a Periodic Ordinary Annuity

27. TVM: Future Value of a Periodic Ordinary Annuity

28. TVM: Future Value of a Periodic Annuity Due

29. TVM: Future Value of a Periodic Annuity Due HP 10B Keystrokes
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12 payments per year
6% annual interest
$100 payment/mo.
Annuity due (BEGIN)
36 monthly payments
Compute future value

30. TVM: Future Value of a Periodic Annuity Due

31. TVM: Present Value of an Annual Ordinary Annuity

32. TVM: Present Value of an Annual Ordinary Annuity HP 10B Keystrokes
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1 payment per year
$1,200 payment/year
3 year term
8% annual interest
Compute present value

33. TVM: Present Value of an Annual Ordinary Annuity

34. TVM: Present Value of an Annual Ordinary Annuity

35. TVM: Present Value of a Periodic Ordinary Annuity

36. TVM: Present Value of a Periodic Ordinary Annuity Hp 10B Keystrokes
Clear registers
Monthly payments
$100 payment/mo.
For 36 months
8% annual interest
Compute present value

37. TVM: Present Value of a Periodic Ordinary Annuity

38. TVM: Present Value of a Periodic Annuity Due

39. TVM: Present Value of a Periodic Annuity Due HP 10B Keystrokes
Clear registers
Monthly payments
$100 monthly payment
8% annual interest
36 months
Annuity due (BEGIN)
Compute present value

40. TVM: Present Value of a Periodic Annuity Due

41. TVM: Annual Sinking Fund Payment for Ordinary Annuities

42. TVM: Annual Sinking Fund Payment for Ordinary Annuities HP 10B Keystrokes
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One payment per year
6% annual interest
$5,000 future value
In three years
Compute the annual
payment.

43. TVM: Periodic Sinking Fund Payment for Ordinary Annuities

44. TVM: Periodic Sinking Fund Payment for Ordinary Annuities

45. TVM: Periodic Sinking Fund Payment for Ordinary Annuities HP 10B Keystrokes
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Quarterly payments
$25,000 future value
24 payments (6 years)
8% annual interest
Compute quarterly
payment

46. TVM: Periodic Sinking Fund Payment for an Annuity Due

47. TVM: Periodic Sinking Fund Payment for an Annuity Due HP 10B Keystrokes
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Quarterly payments
$25,000 future value
24 quarterly payments
8% annual interest
Annuity due (BEGIN)
Compute quarterly payment

48. TVM: Annual Payment to Amortize Debt for Ordinary Annuities

49. TVM: Annual Payment to Amortize Debt for Ordinary Annuities HP 10B Keystrokes
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Annual payments
$5,000 present value
3 year term
8% annual interest
Compute annual payment

50. TVM: Periodic Payment to Amortize Debt for Ordinary Annuities

51. TVM: Periodic Payment to Amortize Debt for Ordinary Annuities

52. TVM: Periodic Payment to Amortize Debt for Ordinary Annuities HP 10B Keystrokes
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Monthly payments
$100,000 loan (PV)
7.5% annual interest
360 monthly pmts
Compute monthly payment

53. MORE TIME VALUE OF MONEY
Perpetuities
Growing Perpetuities
The PV of Uneven Cash Flows
The PV of Grouped Cash Flows

54. MORE TIME VALUE OF MONEY: Perpetuities

55. MORE TIME VALUE OF MONEY: Perpetuities

56. MORE TIME VALUE OF MONEY: Growing Perpetuities

57. MORE TIME VALUE OF MONEY: Growing Perpetuities

58. MORE TIME VALUE OF MONEY: The PV of Uneven Cash Flows

59. MORE TIME VALUE OF MONEY: The PV of Uneven Cash Flows

60. MORE TVM The PV of Uneven Cash Flows HP 10B Keystrokes
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One payment per year
Initial CF = 0
1st CF = $500
2nd CF = $0
3rd CF = $1,500
4th CF = $2,500
Discount rate = 10%
Compute (net) present value

61. MORE TIME VALUE OF MONEY: The PV of Grouped Cash Flows

62. MORE TIME VALUE OF MONEY: The PV of Grouped Cash Flows HP 10B Keystrokes
Clear registers
One payment per year
Initial CF = $0
1st grouped CF = $10,000
CF occurs 3 times
2nd grouped CF = $15,000
CF occurs 2 times
3rd CF = $100,000 (1 time)
Annual discount rate = 12%
Compute (net) present value