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Formulas and methods for calculating present value (pv) and future value (fv) in finance, including simple interest, compound interest, annuities, loan amortization, and bond valuation. It covers topics such as ordinary and due annuities, loan payments, and bond market values.
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Simple Method Future Value (FV) = PV. (1 x N) Present Value (PV)= FV / (1 x N) Compounding Method Future Value (FV) = PV. (1+i)^n Present Value (PV)= FV / (1+i)^n N = log FV – Log PV / Log (1+i)^n EAR = (1 + i/m)^m – 1 Annuity
Loan Amortization
PMt = PV / {(1/i) + (1 / i(1+i)^n)}
Trial & Error Method
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Bounding
Dividend Growth Model Value of Security (Vs) = PV^n1+ PV^n2+ PV^n3-------- PV^nxx Present/Appropriate Value P 0 =
