Present amount of money ________ to Future Value when it is able to earn interest

Two kinds of interest

Simple Interest:
$1000 at 5%/year for 10 years

Compound Interest
$1000 at 5%/year for 10 years

Formula for FV

Formula for PV

How do you find Discount Rate when calculating interest?

Multiple Cash Flows Calculation
$1000 today
$1200 in a year
$1400 in two years
8% interest
How much in account after 3 years?

What is an annuity

What is a perpetuity

PV of a Perpetuity Formula

PV of t-period Annuity

FV of a t-period annuity

Ordinary Annuity vs Annuity Due

PV of Growing Perpetuity

PV of Growing Annuity

Inflation: Rate at which prices as a whole are increasing
(T/F)

Nominal Interest Rate:
Rate at which money invested _________

Real Interest Rate:
Rate at which purchasing power of an investment _______________

Real Rate = Nominal - Inflation

Effective Annual Interest Rate (EAR)

Annual Percentage Rate (APR)