《金融学教学》bodie2echapter04PPT课件.ppt

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Chapter 4:  Allocating Resources Over Time
Objective
Explain the concept pounding
and discounting and to provide
examples of real life
applications
Three pillars of finance
time value of money: part II, chpt4-chpt6
asset valuation: part III, chpt7-chpt9
risk management: part IV, chpt10-chpt12
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Introduction: Time Value of Money (TVM)
$20 today is worth more than the expectation of $20 tomorrow because:
a bank would pay interest on the $20
inflation makes tomorrows $20 less valuable than today’s
uncertainty of receiving tomorrow’s $20
Contents

The Frequency pounding
present value and discounting
investment decision rules
Multiple Cash Flows
Annuities
Perpetual Annuities
Loan Amortization
Exchange Rates and Time Value of Money
Inflation and Discounted Cash Flow Analysis  Taxes and Investment Decisions
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Assume that the interest rate is 10% .
What this means is that if you invest $1 for one year, you have been promised $1*(1+10/100) or $ next year
Investing $1 for yet another year promises to produce *(1+10/100) or $ in 2-years
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Value of Investing $1
Continuing in this manner you will find that the following amounts will be earned:
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Future Value pound Interest
Copyright © 2009 Pearson Education, Inc.  Publishing as Prentice Hall
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Future Value of a Lump Sum