投资学全英文ppt5

1、 Appendix 4AThe Time Value of MoneyCopyright 2014 Pearson Education, Inc. All rights reserved.4A-2 The Time Value of Money Time Value of Money: as long as an opportunity exists to earn interest, the value of money is affected by the point in time when the money is received A dollar received today is

2、 worth more than a dollar received in the future The sooner you receive money from an investment, the better The sooner your money can begin earning interest, the faster it will growCopyright 2014 Pearson Education, Inc. All rights reserved.4A-3 Interest: The Basic Return to Savers Interest: the “re

3、nt” paid by a borrower for use of the lenders money Simple Interest Interest is paid only on the initial deposit Compound Interest Interest is paid on the initial deposit and any interest accumulated from prior periods Interest is earned on interest More frequent compounding periods provide higher t

4、rue rate of interest Compounding periods range from annually to continuouslyCopyright 2014 Pearson Education, Inc. All rights reserved.4A-4 Figure 4A.1 Calculator KeysCopyright 2014 Pearson Education, Inc. All rights reserved.4A-5 Calculating Time Value: Computers and Spreadsheets Built-in routines

5、similar to financial calculators Values for variables are entered in individual cells on spreadsheet Cells are linked by equations programmed to calculate time values Changes in variable values automatically update time values Provides flexibility to investorsCopyright 2014 Pearson Education, Inc. A

6、ll rights reserved.4A-6 Future Value: An Extension of CompoundingFuture Value: the amount a current deposit will grow to over a period of time when it is placed in an account paying compound interest Future Value Example: How much will $1,000 deposited into an account earning 8% compounded annually

7、be worth in two years?Copyright 2014 Pearson Education, Inc. All rights reserved.4A-7 Future Value: Using an Excel Spreadsheet Copyright 2014 Pearson Education, Inc. All rights reserved.4A-8 Future Value of an AnnuityAnnuity: a stream of equal cash flows that occur at equal intervals over timeOrdina

8、ry Annuity: an annuity where cash flows occur at the end of each periodFuture Value of an Annuity Example: What is the future value of $1,000 deposited at the end of each year for 8 years in an account earning 8% compounded annually? Copyright 2014 Pearson Education, Inc. All rights reserved.4A-9 Fu

9、ture Value of an Annuity: Using an Excel Spreadsheet Copyright 2014 Pearson Education, Inc. All rights reserved.4A-10 Present Value: An Extension of Future Value Present Value: the value today of a sum to be received at some future date Present Value Example: How much would need to be deposited toda

10、y into an accounting earning 8% compounded annually to grow to $1,000 in 7 years?Copyright 2014 Pearson Education, Inc. All rights reserved.4A-11 Present Value: Using an Excel Spreadsheet Copyright 2014 Pearson Education, Inc. All rights reserved.4A-12 Present Value of a Mixed Stream of ReturnsMixed

11、 Stream of Returns: series of returns that have no special patternPresent Value of an Annuity Example: What is the present value in 2013 of the following stream of returns discounted at 8%?Table 4A.4 Mixed and Annuity Return StreamsCopyright 2014 Pearson Education, Inc. All rights reserved.4A-13 Tab

12、le 4A.5 Mixed-Stream Present-Value CalculationCopyright 2014 Pearson Education, Inc. All rights reserved.4A-14 Present Value of a Mixed Stream of Returns: Using an Excel Spreadsheet Copyright 2014 Pearson Education, Inc. All rights reserved.4A-15 Present Value of an Annuity Annuity: a stream of equa

13、l cash flows that occur at equal intervals over time Present Value of an Annuity Example: What is the present value of $50 deposited at the end of each year for 5 years in an account earning 8% compounded annually? Copyright 2014 Pearson Education, Inc. All rights reserved.4A-16 Present Value of an

14、Annuity: Using an Excel Spreadsheet Copyright 2014 Pearson Education, Inc. All rights reserved.4A-17 Appendix 4AAdditional Chapter ArtCopyright 2014 Pearson Education, Inc. All rights reserved.4A-18 Table 4A.1 Savings Account Balance Data (5% interest compounded annually)Copyright 2014 Pearson Education, Inc. All rights reserved.4A-19 Table 4A.2 Savin