Single Cash Flow PV = FV (1+r)n Annuity : FV = PV(1+r) n (1+r)" − 1 (1+r)n−1 * FVA = PMT FVAD = PMT (1+r) r PVA = PMT r 1 1 1 (1+r)n PVAD = PMT (1+r)*(1+r) r r r(1+r)n PMT = PV (1+r)n-1 Perpetuities PVP = PMT r

Single Cash Flow PV = FV (1+r)n Annuity : FV = PV(1+r) n (1+r)" − 1 (1+r)n−1 * FVA = PMT FVAD = PMT (1+r) r PVA = PMT r 1 1 1 (1+r)n PVAD = PMT (1+r)*(1+r) r r r(1+r)n PMT = PV (1+r)n-1 Perpetuities PVP = PMT r

Corporate Fin Focused Approach

5th Edition

ISBN:9781285660516

Author:EHRHARDT

Publisher:EHRHARDT

Chapter4: Time Value Of Money

Section4.12: Uneven, Or Irregular, Cash Flows

Problem 1ST

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Question

Would you rather have a savings account that pays 5 percent interest compounded semiannually or one that pays 5 percent interest compounded daily? Explain. (LO 4-5)

Only use the equations in the picture please!!!!!!!

Single Cash Flow
PV =
FV
(1+r)n
Annuity
:
FV = PV(1+r) n
(1+r)" − 1
(1+r)n−1 *
FVA = PMT
FVAD = PMT
(1+r)
r
PVA = PMT
r
1
1
1
(1+r)n
PVAD = PMT
(1+r)*(1+r)
r
r
r(1+r)n
PMT = PV
(1+r)n-1
Perpetuities
PVP =
PMT
r

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