A.

Future Value and Present Value of a

Single Cash Stream or Several Unequal
Cash Streams

Future Value of Annuity Due

where:

FV future value

PV present value

n periods

r rate

B. Net Present Value of a Project

Solving for PMT, r, n of a Future Value of Annuity

C. Annuities

Apply basic Algebra to solve for the missing item

Present Value of an Ordinary Annuity

Future Value of Ordinary Annuity

or

E. Future Values with Non-Annual

Periods

Present Value of an Annuity Due

Loan Amortization Annual Payments
Note: Solve for the Annuity Payments first.

Loan Amortization Monthly Payments

D. Perpetuity

F. Finding n (years/period) of a future

value problem

Using the FV equation,





FVn
------ = (1+r)n
PV

Substitute the variables, FV and PV, with the
figures given in problem.

Your solution in dividing FVn/PV is your
basis in using the FV Table. For example,
you have 6.1051, and the rate given is 10%.

Since rate (r) is given in the problem, find
the 6.1051 in the 10% column, and check
the corresponding period to arrive at your
answer.

In this example, the answer is 5 years.

G. Finding r (rate) of a future value

problem

I. Strategy Map

You may write problem solving tips here.

FVn
------ = (1+r)n
PV

Substitute the variables, FV and PV, with the
figures given in problem.

Your solution in dividing FVn/PV is your
basis in using the FV Table. For example,
you have 6.1051, and the period given is 5
years.

Since period (n) is given in the problem, find
the 6.1051 in the 5 years column, and check
the corresponding rate to arrive at your
answer.

In this example, the answer is 10% years.

H. Making Interest Rates Comparable