Questions tagged [time-value]
The time-value tag has no usage guidance.
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Which equation is used for calculation interest rate of lump sum?
I was watching CFA level1 videos and found this odd question.
Elmer has won his $4 million state lottery and has been offered 20 annual payments of $200,000 each beginning today or a single payment ...
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Discounted cash flow: meaning of terminal value formula
I am reading a book about stock valuation using fundamental analysis — Accounting for Value by Stephen Penman. The following discounted cash flow (DCF) formula appears in chapter 2 with almost no ...
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Friend has 90k USD after a home sale, use it to buy a new home in new location or pay down med school loans?
I have a friend. He is an up-and-coming doctor. This means he has about $160k in student loans. The interest rate is about 6%. In a month or two he is selling his house. From this sale he will have ...
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Time Value of Money — Interest Paid on Mortgage
You you bought a house worth $328,000. You paid 25% of the purchase price in cash and arranged a 25 year mortgage with a rate of 4.0% compounded semi-annually for the remaining balance. The mortgage ...
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Can someone explain the short-term pattern between time and bond prices
One of the factors that affect bond prices is time.
There is a long term pattern and a short term pattern in this. According to my lecture notes they are:
Long-term pattern
The price of discount or ...
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How to understand discounting future cash flow to present cash flow?
I was given this question in class.
You have the opportunity to purchase an investment that will pay $2000
at the beginning of each year for three years. You can earn 5% per
year on a comparable ...
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What will be the impact of time decay on Options Premium?
Let's say you have bought a July Nifty CE or PE in June at Rs. 250 premium. Can you explain how its premium will change over time if nifty increases/decreases towards your strike price?
Basically I ...
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Finding the future value when investing a single sum and then an annuity
If I invest amount A today for N years and then invest amount B every year for the same N years (as an ordinary annuity), then to find the future value at the end of N years should I treat the first ...
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NPV and efficient market hypothesis
If I have an opportunity of investment that costs I in year 0 and gives me CF_1 in year 1, I will accept it only if NPV>0
NPV = -I + (CF_1)/(1+k)
Now in order to discount the cash flows I have to ...
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How do I stop myself from always placing a monetary value on my time?
I am a University student in my final year. I had a paid internship over the summer which has turned into part time work throughout the year.
Recently I have noticed myself placing a monetary value ...
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how do you value what your leisure time is worth?
Time and money are finite resources. They're reasonably easy to convert from one to the other. Some people value one more than the other. Some circumstances may warrant valuing one more than the other....
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Rationale behind discounted bonds?
I'm trying to understand if my rationale behind discount bonds is correct.
Let's say Company X issues a 2 year $1000 bond at 5%, market interest rate is 10%. Because the coupon rate < the market ...
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