ApplicationsofSimpleInterestValuationPrinciple幻灯片.pptVIP

Chapter 7 Applications of Simple Interest;Example: an investment that will deliver a single payment of $110 in 1 year. What is the most you should pay to buy the investment if you require a minimum rate of return of 10% pa? Or you require a rate of return of 8% pa?;The process of calculating a payment’s present value is often called “discounting the payment”. The interest rate used in the present value calculation is then often called the discount rate.;;;;;;Valuation Principle;;;b;Example 7.2 B Valuation Of An Interest-Earning Obligation;;;;;;;Exercise: P-252: 5,6 P-257: 3,5 P-242: 11,13 P-238: 7