教程craig effective interest rates1有效利率.pdfVIP

CraigMellare

DisciplineofFinance

Dealingwithdifferingcashflowandcompoundingintervals

–fourpossiblescenarios

Scenario1–Cashflowintervalandannualcompoundingperiodmatch

onanannualbasis

Youpurchaseanassetthatpayscashflowsof$100peryearfor5yearsandhasa

requiredrateofreturnof10%p.a.compoundedannually.Whatistheasset’sprice

today?

Timelineofcashflowpressedinyears):

012345

|_____|_____|_____|_____|_____|

$100$100$100$100$100

Thiscashflowstreamisanannuityandwillbesolvedusingthepresentvalueofan

annuityequation.

Sincethecashflowinterval(yearly)andthecompoundingperiod(alsoyearly)match

thenyoucansimplyenterthevaluesintotheformulawithoutadjustmenttodetermine

thepresentvalue.

Forexample:

⎡()−5⎤

11.1−

PV$100$379.08

⎢⎥

⎣0.1⎦

CraigMellarePage1

UniversityofSydney

Scenario2–Co