time value of money agec 489-689 spring 2010. page 60 in booklet
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![Page 1: Time Value of Money AGEC 489-689 Spring 2010. Page 60 in booklet](https://reader035.vdocuments.us/reader035/viewer/2022062714/56649d635503460f94a46629/html5/thumbnails/1.jpg)
Time Value of MoneyTime Value of Money
AGEC 489-689AGEC 489-689
Spring 2010Spring 2010
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Page 60 in bookletPage 60 in booklet
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2009 2010 2011 2012 2013 ……. 2019
Time Value of Money…Time Value of Money…
Assume it is the year 2009 and you have been given the choice of a single payment of $500 paid to you ten years from now (2019) or a payment of $300 today. Which would you choose?
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Page 60 in bookletPage 60 in booklet
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Present Value Interest Factor (PIF) Table
PIFr,n = (1 + r) -n
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I would take the $300 today since it has a higher present value, given my discount rate of 6%, than $500 ten years from now.
I would take the $300 today since it has a higher present value, given my discount rate of 6%, than $500 ten years from now.
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Present Value Interest Factor (PIF) Table
PIFr,n = (1 + r) -n
![Page 8: Time Value of Money AGEC 489-689 Spring 2010. Page 60 in booklet](https://reader035.vdocuments.us/reader035/viewer/2022062714/56649d635503460f94a46629/html5/thumbnails/8.jpg)
Page 61 in bookletPage 61 in booklet
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EPIFr,n = [1 – (1 / (1+ r)n)] / r
Equal Payment Present Value Interest Factor (EPIF) Table
![Page 10: Time Value of Money AGEC 489-689 Spring 2010. Page 60 in booklet](https://reader035.vdocuments.us/reader035/viewer/2022062714/56649d635503460f94a46629/html5/thumbnails/10.jpg)
EPIFr,n = [1 – (1 / (1+ r)n)] / r
Equal Payment Present Value Interest Factor (EPIF) Table
![Page 11: Time Value of Money AGEC 489-689 Spring 2010. Page 60 in booklet](https://reader035.vdocuments.us/reader035/viewer/2022062714/56649d635503460f94a46629/html5/thumbnails/11.jpg)
Pages 61-62 in bookletPages 61-62 in booklet
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Present Value Interest Factor (PIF) Table
PIFr,n = (1 + r) -n
![Page 13: Time Value of Money AGEC 489-689 Spring 2010. Page 60 in booklet](https://reader035.vdocuments.us/reader035/viewer/2022062714/56649d635503460f94a46629/html5/thumbnails/13.jpg)
Present Value Interest Factor (PIF) Table
PIFr,n = (1 + r) -n
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Page 62 in bookletPage 62 in booklet
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Page 63 in bookletPage 63 in booklet
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Pages 63-64 in bookletPages 63-64 in booklet
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EPIFr,n = [1 – (1 / (1+ r)n)] / r
Equal Payment Present Value Interest Factor (EPIF) Table
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Page 64-65 in bookletPage 64-65 in booklet
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EPIFr,n = [1 – (1 / (1+ r)n)] / r
Equal Payment Present Value Interest Factor (EPIF) Table
![Page 21: Time Value of Money AGEC 489-689 Spring 2010. Page 60 in booklet](https://reader035.vdocuments.us/reader035/viewer/2022062714/56649d635503460f94a46629/html5/thumbnails/21.jpg)
Page 65 in bookletPage 65 in booklet
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Page 65-66 in bookletPage 65-66 in booklet
Know equations 40, 44 and 45Know equations 40, 44 and 45
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Let’s Work Some Let’s Work Some ProblemsProblems