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Questions tagged [time-value]

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Present value of an annuity by formula and calculator different

I'm having some issues understanding how TVM calculators as compared to the present value formula works, they should give the same result but they don't. The questions is: Suppose you are considering ...
fluter's user avatar
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1 vote
2 answers
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NPV calculation, how to consider the time

I'm calculating the NPV for a project, the project has an investment now and an investment in 12 months, it says the production will start in 12 months and once the production starts the project will ...
user126611's user avatar
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3 answers
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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 ...
Eric.P's user avatar
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3 votes
3 answers
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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 ...
Flux's user avatar
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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 ...
Scott Skiles's user avatar
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4 votes
2 answers
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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 ...
qmack's user avatar
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6 votes
2 answers
453 views

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 ...
CountDOOKU's user avatar
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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 ...
CountDOOKU's user avatar
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192 views

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 ...
Selvam's user avatar
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1 vote
1 answer
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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 ...
user91685's user avatar
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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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6 votes
5 answers
2k views

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 ...
Tim's user avatar
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95 votes
16 answers
19k views

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....
Joe.E's user avatar
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1 answer
234 views

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 ...
sir_thursday's user avatar