If we can measure this opportunity cost, we can Translate SI today into its equivalent in the future (compounding Today Future K THE UNTED STATES OF AMERICA YO L ONE DOLLAR
If we can measure this opportunity cost, we can: • Translate $1 today into its equivalent in the future (compounding). Today ? Future
If we can measure this opportunity cost, we can Translate SI today into its equivalent in the future (compounding Today Future K THE UNTED STATES OF AMERICA YO L ONE DOLLAR Translate SI in the future into its equivalent today (discounting)
If we can measure this opportunity cost, we can: • Translate $1 today into its equivalent in the future (compounding). • Translate $1 in the future into its equivalent today (discounting). Today ? Future
If we can measure this opportunity cost, we can Translate SI today into its equivalent in the future (compounding Today Future K THE UNTED STATES OF AMERICA YO L ONE DOLLAR Translate SI in the future into its equivalent today (discounting) Today Future THE UNITED STATES OF AMERICA ONE DOLLAR
If we can measure this opportunity cost, we can: • Translate $1 today into its equivalent in the future (compounding). • Translate $1 in the future into its equivalent today (discounting). ? Today Future Today ? Future
future value
Future Value
Future value -single sums Ifyou deposit $100 in an account earning 6%, how much would you have in the account after l year?
Future Value - single sums If you deposit $100 in an account earning 6%, how much would you have in the account after 1 year?