The Time Value of Money

Objectives

• Utilize the time value of money to analyze financial problems

Reading

• Chapter 2: Present Value
• Chapter 3: Stock and Bond Valuation: Annuities and Perpetuities
• Example: Financial Calculator

Introduction

Time Value of Money

Time Value of Money Concept

Present Value

Future Value

Annuities

Present Value of an Annuity

Future Value of an Annuity

Perpetuities

Present Value of a Perpetuity

Present Value of a Growing Perpetuity

The Dividend Discount Model

• Video Example
• Guest Video: Edspira

Yield to Maturity