The time value of money (lecture 3)

1.

2.

Lecture 3.
The Time Value of Money
(Part 1)
(Brooks, Raymond. 2016. Financial
management: core concepts. Chapter 3)
Dr. Elmira Mynbayeva
September 2023

3.

Learning objectives:
LO1: Calculate FV and understand compounding.
LO2: Calculate PV and understand discounting.
LO3: Calculate implied IR and waiting time from the time
value of money equation.
LO4: Apply the TVM equation using formula, calculator, and
spreadsheet.
LO5: Explain the Rule of 72, a simple estimation of
doubling values.

4.

Time value of money (TVM)
Importance of decision
making
Every decision making
involves Uncertainty &
Time
for now, we ignore
uncertainty
to internalize TIME

5.

TVM. Some terminology