Calculation of present value - Revision history

Dirkjan at 19:23, 27 August 2020

2020-08-27T19:23:38Z

Dirkjan at 18:38, 27 August 2020

2020-08-27T18:38:36Z

Dirkjan: Created page with "The table below lists different financial securities and how you can determine the present values of these: {| class="wikitable" !Year !0 !1 !2... !...t-1 !t !t+1 !Present Va..."

2020-08-25T07:21:33Z

Created page with "The table below lists different financial securities and how you can determine the present values of these: {| class="wikitable" !Year !0 !1 !2... !...t-1 !t !t+1 !Present Va..."

New page

The table below lists different financial securities and how you can determine the present values of these:

{| class="wikitable"
!Year
!0
!1
!2...
!...t-1
!t
!t+1
!Present Value
!When to use?
|-
|[[Perpetuity|Perpetuity]]
|
|1
|1...
|1
|1
|1...
|\[\large \frac{1}{r}\]
|Use this for an infinite series of yearly payments
|-
|t-period [[Annuity|Annuity]]
|
|1
|1...
|1
|1
|
|\[\large \frac{1}{r} - \frac{1}{r(1+r)^t}\]
|Use this when you get a fixed sum paid each year for <t> periods
|-
|t-period [[Annuity Due|Annuity Due]]
|1
|1
|1...
|1
|
|
|\[\large (1+r)*(\frac{1}{r} - \frac{1}{r(1+r)^t})\]
|Same as the t-period annuity but payments start immediatly
|-
|[[Growing Perpetuity|Growing Perpetuity]]
|
|1
|\[1*(1+g)\]
|\[1*(1+g)^t-2\]
|\[1*(1+g)^(t-1)\]
|\[1*(1+g)^t\]
|\[\large \frac{1}{r-g}\]
|Use this for perpetuities where a yearly, growing cost ''g'' is involved
|-
|[[Growing Annuity|Growing Annuity]]
|
|1
|\[1*(1+g)\]
|\[1*(1+g)^(t-2)\]
|\[1*(1+g)^(t-1)\]
|
|\[\large (\frac{1}{r-g} - \frac{1}{r-g} * \frac{(1+g)^t}{(1+r)^t})\]
|Use this for annuities that grow at rate ''g''
|-
|}
[[Category:finance]]

[[Category:M12]]

[[Category:Principles of Corporate Finance]]

[[Category:Term]]

← Older revision		Revision as of 18:38, 27 August 2020
Line 1:		Line 1:
−	~~The table below lists different financial securities and how you can determine the~~ present ~~values of these:~~	+	Calculation of present value
−
−	~~{\| class="wikitable"~~
−	~~!Year~~
−	!0
−	!1
−	~~!2...~~
−	~~!...t-1~~
−	!t
−	~~!t+1~~
−	~~!Present Value~~
−	~~!When to use?~~
−	\|-
−	~~\|[[Perpetuity\|Perpetuity]]~~
−	\|
−	\|1
−	~~\|1...~~
−	\|1
−	\|1
−	~~\|1...~~
−	~~\|\[\large \frac{1}{r}\]~~
−	~~\|Use this for an infinite series of yearly payments~~
−	\|-
−	~~\|t-period [[Annuity\|Annuity]]~~
−	\|
−	\|1
−	~~\|1...~~
−	\|1
−	\|1
−	\|
−	~~\|\[\large \frac{1}{r} - \frac{1}{r(1+r)^t}\]~~
−	~~\|Use this when you get a fixed sum paid each year for <t> periods~~
−	\|-
−	~~\|t-period [[Annuity Due\|Annuity Due]]~~
−	\|1
−	\|1
−	~~\|1...~~
−	\|1
−	\|
−	\|
−	~~\|\[\large (1+r)*(\frac{1}{r} - \frac{1}{r(1+r)^t})\]~~
−	~~\|Same as the t-period annuity but payments start immediatly~~
−	\|-
−	~~\|[[Growing Perpetuity\|Growing Perpetuity]]~~
−	\|
−	\|1
−	~~\|\[1*(1+g)\]~~
−	~~\|\[1*(1+g)^t-2\]~~
−	~~\|\[1*(1+g)^(t-1)\]~~
−	~~\|\[1*(1+g)^t\]~~
−	~~\|\[\large \frac{1}{r-g}\]~~
−	~~\|Use this for perpetuities where a yearly, growing cost ''g'' is involved~~
−	\|-
−	~~\|[[Growing Annuity\|Growing Annuity]]~~
−	\|
−	\|1
−	~~\|\[1*(1+g)\]~~
−	~~\|\[1*(1+g)^(t-2)\]~~
−	~~\|\[1*(1+g)^(t-1)\]~~
−	\|
−	~~\|\[\large (\frac{1}{r-g} - \frac{1}{r-g} * \frac{(1+g)^t}{(1+r)^t})\]~~
−	~~\|Use this for annuities that grow at rate ''g''~~
−	\|-
−	\|}
	[[Category:finance]]		[[Category:finance]]

← Older revision		Revision as of 19:23, 27 August 2020
Line 1:		Line 1:
−	~~Calculation~~ of ~~present value~~	+	The table below lists different financial securities and how you can determine the present values of these:
		+
		+	{\| class="wikitable"
		+	!Year
		+	!0
		+	!1
		+	!2...
		+	!...t-1
		+	!t
		+	!t+1
		+	!Present Value
		+	!When to use?
		+	\|-
		+	\|[[Perpetuity\|Perpetuity]]
		+	\|
		+	\|1
		+	\|1...
		+	\|1
		+	\|1
		+	\|1...
		+	\|\[\large \frac{1}{r}\]
		+	\|Use this for an infinite series of yearly payments
		+	\|-
		+	\|t-period [[Annuity\|Annuity]]
		+	\|
		+	\|1
		+	\|1...
		+	\|1
		+	\|1
		+	\|
		+	\|\[\large \frac{1}{r} - \frac{1}{r(1+r)^t}\]
		+	\|Use this when you get a fixed sum paid each year for <t> periods
		+	\|-
		+	\|t-period [[Annuity Due\|Annuity Due]]
		+	\|1
		+	\|1
		+	\|1...
		+	\|1
		+	\|
		+	\|
		+	\|\[\large (1+r)*(\frac{1}{r} - \frac{1}{r(1+r)^t})\]
		+	\|Same as the t-period annuity but payments start immediatly
		+	\|-
		+	\|[[Growing Perpetuity\|Growing Perpetuity]]
		+	\|
		+	\|1
		+	\|\[1*(1+g)\]
		+	\|\[1*(1+g)^t-2\]
		+	\|\[1*(1+g)^(t-1)\]
		+	\|\[1*(1+g)^t\]
		+	\|\[\large \frac{1}{r-g}\]
		+	\|Use this for perpetuities where a yearly, growing cost ''g'' is involved
		+	\|-
		+	\|[[Growing Annuity\|Growing Annuity]]
		+	\|
		+	\|1
		+	\|\[1*(1+g)\]
		+	\|\[1*(1+g)^(t-2)\]
		+	\|\[1*(1+g)^(t-1)\]
		+	\|
		+	\|\[\large (\frac{1}{r-g} - \frac{1}{r-g} * \frac{(1+g)^t}{(1+r)^t})\]
		+	\|Use this for annuities that grow at rate ''g''
		+	\|-
		+	\|}
	[[Category:finance]]		[[Category:finance]]