个人理财 Section 1 (Time Value of Money).ppt

* * * * * * * * 2-* Future Value of an Annuity FVA = PMT x (((1 + I)n – 1) / I) To determine the future value of a series of equal amounts received or paid over a specified number of years. Example: How much will you have at the end of three years if you make annual deposits of $500 each compounded annually at 8%? FVA = 500[(1 + .08)3 - 1] / .08 FVA = 500 [(1.08)3 - 1] / .08 FVA = 500 (1.26 - 1) / .08 FVA = 500 (.26) / .08 FVA = 500 (3.25) FVA = $1,623.20 (rounding factor) 2-* Similar to the example given of the future value of 1, the amount can be determined by using a future value of an annuity table. Future Value of an Annuity 2-* 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 2.010 2.020 2.030 2.040 2.050 2.060 2.070 2.080 2.090 3.030 3.060 3.091 3.122 3.153 1.191 1.225 1.260 1.295 1 2 3 Interest Rate 0.01 0.02 0.03 0.04 0.05 0.06 0.07 0.08 0.09 Period 3.030 3.060 3.091 3.122 3.153 3.184 3.215 1.260 3.278 3 0.08 1.000 2.080 3.246 FVA = A x IF FVA = $500 x 3.246 (3.24640 rounded to fit screen) FVA = $1,623.20 Future Value of an Annuity 2-* Converting an Ordinary Annuity (OA) Into an Annuity Due (AD) The conversion formula is: FV(AD) = FV(OA) × (1 + i ) This formula accounts for the fact that each payment earns interest for one extra period. 2-* Goal Planning Time value of money techniques are useful for estimating required funds to meet future goals. Identify specific goals. What is the particular goal? When do you plan to achieve the goal? How much will need to be saved currently or each year? Inflation must be considered since most goals are long-term. Determine how much must be saved each year to achieve these goals. * * * * * * * * * * * * * * * * * * * * * * * * * * * 2-* Personal Family Finance Section 1 Time Value of Money 2-* You have won the lottery and can either take $1,000,000 as a lump sum today, or $100,000 over the next 15 years. Which option would you take, and why? 2-*