Docsity
Docsity

Prepare for your exams
Prepare for your exams

Study with the several resources on Docsity


Earn points to download
Earn points to download

Earn points by helping other students or get them with a premium plan


Guidelines and tips
Guidelines and tips

Finance Lecture 2: Arithmetic and Financial Formulas, Lecture notes of Finance

An overview of various arithmetic and financial formulas used in finance, including excel functions for sum, descriptive statistics, and financial functions such as future value, present value, and payments. Students are introduced to the concept of arithmetic operators, brackets, and array formulas, as well as the use of functions like sum, average, min, max, median, mode, fv, pv, and pmt.

Typology: Lecture notes

2010/2011

Uploaded on 09/14/2011

goofy-6
goofy-6 🇬🇧

5

(6)

230 documents

1 / 15

Toggle sidebar

This page cannot be seen from the preview

Don't miss anything!

bg1
MSc Finance,
MSc International Banking & Finance,
MSc Investment & Finance,
MSc International Accounting & Finance
Computing for Finance
and Financial Analysis
Lecture 2 - Week 2
pf3
pf4
pf5
pf8
pf9
pfa
pfd
pfe
pff

Partial preview of the text

Download Finance Lecture 2: Arithmetic and Financial Formulas and more Lecture notes Finance in PDF only on Docsity!

MSc Finance, MSc International Banking & Finance, MSc Investment & Finance, MSc International Accounting & Finance

Computing for Finance

and Financial Analysis

Lecture 2 - Week 2

Simple Arithmetic = denotes an Excel formula Arithmetic operators: + - / * ^ Use brackets to avoid problems with precedence =SUM( range of cells ) can be used to add a number of values

Descriptive Statistics Mean =AVERAGE( range of cells ) Standard Deviation =STDEV( range of cells ) Minimum =MIN( range of cells ) Maximum =MAX( range of cells ) Median =MEDIAN( range of cells ) Mode =MODE( range of cells )

Downloading From LearnOnline

Financial Functions Future Value =FV() Present Value =PV() Payments =PMT() Net Present Value =NPV() (Covered in Unit 4, Capital Budgeting)

Future Value Given a constant interest rate r , what will a certain sum X be worth after n periods? FV=X(1+r) n e.g. Would you rather have £100 today or £ after ten years? FV=100*(1.06) 10 = £179. X=£ R=6% N=10 YEARS

Present Value Given a constant interest rate r , what is the current value of a certain sum X to be received after n periods? PV=X/(1+r) n e.g. What would you need to save at 5% compound interest to receive £1500 after five years? PV = 1500/(1.05) 5 = £1,175. X=£ R=5% N=5 YEARS

Present Value PV=X/(1+r) n i) Arithmetic formula ( use ^ for “power”) ii) PV Function (sign future value as negative - is this right?)

Payments =PMT() i) Arithmetic formula (not worth doing) ii) PMT Function (sign present value as negative - is this right?)

Next week Tuesday - Friday, Labs Finish working through Units 1 & 2, plus extra examples (on LearnOnline)