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BUSFIN
FINALS BUSFIN
Module 7: Time Value of Money
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Cards (9)
Formula of PV of 1
P
V
o
f
1
=
PV\ of\ 1\ =
P
V
o
f
1
=
(
1
+
E
I
R
)
−
n
\ \left(1+EIR\right)^{-n}
(
1
+
E
I
R
)
−
n
PV means...
Present Value
FORMULA of PV of Ordinary Annuity
P
V
o
f
O
r
d
i
n
a
r
y
A
n
n
u
i
t
y
=
PV\ of\ Ordinary\ Annuity\ =
P
V
o
f
O
r
d
ina
ry
A
nn
u
i
t
y
=
(
(
1
+
E
I
R
)
−
n
−
1
E
I
R
)
\ \left(\frac{\left(1+EIR\right)^{-n}-1}{EIR}\right)
(
E
I
R
(
1
+
E
I
R
)
−
n
−
1
)
EIR means...
Effective Interest Rate
Do you need to round of the PV Factors?
FALSE
FV means...
Future Value
FORMULA of FV of Ordinary Annuity
F
V
o
f
O
r
d
i
n
a
r
y
A
n
n
u
i
t
y
=
FV\ of\ Ordinary\ Annuity \ =
F
V
o
f
O
r
d
ina
ry
A
nn
u
i
t
y
=
P
V
⋅
(
(
1
+
E
I
R
)
n
−
1
E
I
R
)
\ PV\ \cdot\ \left(\frac{\left(1+EIR\right)^n-1}{EIR}\right)
P
V
⋅
(
E
I
R
(
1
+
E
I
R
)
n
−
1
)
FORMULA of FV of 1
F
V
=
FV\ =
F
V
=
P
V
⋅
(
1
+
E
I
R
)
n
\ PV\ \cdot\ \left(1+EIR\right)^n
P
V
⋅
(
1
+
E
I
R
)
n
n represents...
Number of periods or years
