Time Value of Money 1 Future Value= PV(1 + I)T How much will I have…..Pages 580-581.

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Presentation transcript:

Time Value of Money 1 Future Value= PV(1 + I)T How much will I have…..Pages

Time Value of Money 2 Present Value: what is it worth to me now…Pages

Time Value of Money 3 Future/Present Value  Using calculator or Microsoft Excel N = Number of Periods I = Rate  In calculator 7% = 7; in Microsoft Excel =.07 PV = What’s Invested Now  Negative FV = What You Will Have In Future  Solving for: N I  N and I must be expressed in same terms

Time Value of Money 4 Functions  FV: what is dollar amount in future?  PV: what is value today?  NPER: number of periods  RATE: rate of return

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