Scribd
Upload
4 views3 pages

Script

The document discusses the future value of money, focusing on two main concepts: the future value of a single sum and the future value of annuities. It explains the calculation methods for both simple and compound interest, providing examples for each, as well as detailing various types of annuities and their future values. Key formulas and examples illustrate how to determine the future value based on different scenarios and interest rates.

Uploaded by

vynguyenthiyen70
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
4 views3 pages

Script

The document discusses the future value of money, focusing on two main concepts: the future value of a single sum and the future value of annuities. It explains the calculation methods for both simple and compound interest, providing examples for each, as well as detailing various types of annuities and their future values. Key formulas and examples illustrate how to determine the future value based on different scenarios and interest rates.

Uploaded by

vynguyenthiyen70
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
You are on page 1/ 3

To continue Tú’s presentation, i’m going to talk about future value of money

There are 2 main contents that are the future value of single sum and future
value of annutities

Let start with Future Value Single sum (Giá trị tương lai của tiền)

Concept (Khái niệm)

The future value of single sum is the value of money that can be received at a time in
the future, including the principal amount and the interest amount calculated up to the
time of consideration. The amount of interest generated between the present and the
future depends on the interest rate and the method of calculating interest.

Because there are 2 ways to calculate interest: simple interest and compound interest,
when calculating the future value of single sum we also have 2 formulas:

First

Simple Interest Method (Phương pháp tính lãi đơn)

Formula (Công thức):


FVn = PV + I
From this formula, we can deduce 2 other ways to calculate FVn.

FVn = PV + PV.n.r

FVn = PV * (1 + r * n)

we have a example

Suppose you invest $1,000 at a simple interest rate of 5% per year for 3 years.

Applying the 3rd formula we have result is 1150

Next is Compound Interest Method (Phương pháp tính lãi kép)

Formula (Công thức):

FVn = PV + I
FVn = PV * (1 + r)n
we have a same example, but the future value of money is caculated by method

so its future value is 1157,63

Future Value of Annuities (Giá trị tương lai của chuỗi tiền tệ)

The future value of a series of cash flows is determined by the sum of the future
values of all the cash flows in that series.The future value of each payment is equal to
that payment plus all the interest generated by that payment and calculated using the
compound interest method.

In the Future Value of Annuities we have 4 other contents. That are Future Value
of an Ordinary Annuity, Future Value of an Annuity Due , Future Value of an
Uneven cash flow at the end of the period, and Future Value of an Uneven cash
flow at the beginning of the period

First we wil go to the Future Value of an Ordinary Annuity

Here is an example

If you deposit $500 at the end of each year for 4 years at an interest rate of 5% per
year. After 4 years, how much money will you have?

4 years mean 4 periods so n is 4. Applying the formula we have the result is 2155

Second, we go to Future Value of an Annuity Due

Focus on example, You deposit $500 in the bank at the beginning of each year,
with an interest rate of 8% per year for 5 years. After 5 years, you will have
3167,96 $
Next slide, we wil discuss Future Value of an Uneven cash flow at the end of the
period

If you deposit $5, $10, $12 and $15 in the bank for 4 years at the beginning of each
year. The bank interest rate is 6%/year. How much money will you have at the end of
year 4?

Through the example we see that n is 5 Because interest is calculated at the


beginning of the year

Look at the formula then you apply and you have a result is 47,6 $

The last Future Value of an Uneven cash flow at the beginning of the period

We also have example like Future Value of an Uneven cash flow at the end of the
period

But interest is calculated at the beginning of the year, so n is 4

and after 4 year you will have 44.91 $

You might also like