EquivalentPaymentStreams幻灯片.pptVIP

Chapter 8 Compound Interest: future value and present value;We can compare the economic values of two payment streams.;Criterion for the Equivalence of Two Payment Streams:;Example;Solution:;E1= future value of $1500 on focal date E2= present value of $2500 on focal date E3= future value of $1000 on focal date E4= present value of 2x on focal date the equation of value is j=8% compounded semiannually m=2 i=j/m=4%;E1= future value of $1500 on focal date n=(1+11/2)*2=5;E3= future value of $1000 on focal date n= 11/2 *2=3;Example;Solution:;E1= the present valu