Future Value

$108.00

$116.64

$125.97
$125.97

$1,210.00

$16,216.99

Present Value
$94.34

$89.00

$1,126.97

$3,083.19

Multiple Cash Flows

Time Cash Flow FV
0 $0 $0
1 $20,000 $23,153
2 $50,000 $55,125
3 $90,000 $94,500
4 $180,000 $180,000
Sum = FV= $352,778

Time Cash Flow FV

0 $0 $0.00
1 $10,000 $10,404.00
2 $20,000 $20,400.00
3 $40,000 $40,000.00

FV= $70,804.00

Time Cash Flow PV

0 $0 $0
1 $20,000 $19,048
2 $50,000 $45,351
3 $90,000 $77,745
4 $180,000 $148,086
 Sum = PV= $290,231

Using the Excel NPV function $290,231

Time Cash Flow PV

0 $50,000 $50,000.00
1 $100,000 $91,743.12
2 $500,000 $420,840.00
3 $300,000 $231,655.04

PV= $794,238.16

Using the Excel NPV function $794,238.16

Special Cash Flow Streams

$ 1,000,000,000

$ 1,100,000,000

$ 2,500,000

Growing perpetuity example of a growing company

$ 1,428,571,429

IRA annuity example

Mathematical formula ==> $86,460.17

Time Cash Flow PV

1 $5,000 $4,807.69
2 $5,000 $4,622.78
3 $5,000 $4,444.98
4 $5,000 $4,274.02
5 $5,000 $4,109.64
6 $5,000 $3,951.57
7 $5,000 $3,799.59
8 $5,000 $3,653.45
9 $5,000 $3,512.93
10 $5,000 $3,377.82
11 $5,000 $3,247.90
12 $5,000 $3,122.99
13 $5,000 $3,002.87
14 $5,000 $2,887.38
 15 $5,000 $2,776.32
16 $5,000 $2,669.54
17 $5,000 $2,566.87
18 $5,000 $2,468.14
19 $5,000 $2,373.21
20 $5,000 $2,281.93
21 $5,000 $2,194.17
22 $5,000 $2,109.78
23 $5,000 $2,028.63
24 $5,000 $1,950.61
25 $5,000 $1,875.58
26 $5,000 $1,803.45
27 $5,000 $1,734.08
28 $5,000 $1,667.39
29 $5,000 $1,603.26
30 $5,000 $1,541.59
PV = Sum = $86,460.17

Using the Excel PV function $86,460.17

Annuity example with insurance product

$ 124,622.10
Using the Excel PV function $124,622.10

Car loan example

$ 5,548.19
Using the Excel PMT function -$5,548.19

IRA growing annuity example

$ 110,381

Time Cash Flow PV

1 $5,000 $4,808
2 $5,100 $4,715
3 $5,202 $4,625
4 $5,306 $4,536
5 $5,412 $4,448
6 $5,520 $4,363
7 $5,631 $4,279
8 $5,743 $4,197
9 $5,858 $4,116
10 $5,975 $4,037
11 $6,095 $3,959
12 $6,217 $3,883
 13 $6,341 $3,808
14 $6,468 $3,735
15 $6,597 $3,663
16 $6,729 $3,593
17 $6,864 $3,524
18 $7,001 $3,456
19 $7,141 $3,390
20 $7,284 $3,324
21 $7,430 $3,260
22 $7,578 $3,198
23 $7,730 $3,136
24 $7,884 $3,076
25 $8,042 $3,017
26 $8,203 $2,959
27 $8,367 $2,902
28 $8,534 $2,846
29 $8,705 $2,791
30 $8,879 $2,738
PV = Sum = $110,381

FV of the annuity value

$ 358,009

Growing annuity savings example

$ 135,269.09
$ 6,472.96

Adjusting for Inflation

$98,631.25

Real Value
US Box Office Years to
Film Year in 2015 $
Gross (MM) 2015 (MM)
Avatar $760 2009 6 $907
Titanic $659 1997 18 $1,122
Star Wars: Force $937 2015 0 $937
Awakens
Star Wars $460 1977 38 $1,414
E.T.: The Extra- $435 1982 33 $1,154
Terrestrial

Gone with the Wind $199 1939 76 $1,881

Inflation and Retirement

Inflation rate 2.80%
Nominal interest rate 5.50%
real Interest Rate 2.63%
PV at age 65 in real terms $1,816,066
PV at age 65 in nominal terms $4,774,090
PV at age 30 using real savings $732,917
PV at age 30 using nominal savings $732,917

Real
Age
Retirement Payments Payment
600000 66 $100,000
500000 67 $100,000
400000
68 $100,000
Payment

300000
200000 69 $100,000
100000 70 $100,000
0 71 $100,000
66 68 70 72 74 76 78 80 82 84 86 88 90 72 $100,000
73 $100,000
Age 74 $100,000
75 $100,000
Nominal Real
76 $100,000
77 $100,000
78 $100,000
79 $100,000
80 $100,000
$100.00 81 $100,000
82 $100,000
83 $100,000
84 $100,000
85 $100,000
86 $100,000
87 $100,000
88 $100,000
89 $100,000
90 $100,000
 Nominal Payment

$ 270,241.55
$ 277,808.32
$ 285,586.95
$ 293,583.38
$ 301,803.72
$ 310,254.22
$ 318,941.34
$ 327,871.70
$ 337,052.11
$ 346,489.56
$ 356,191.27
$ 366,164.63
$ 376,417.24
$ 386,956.92
$ 397,791.71
$ 408,929.88
$ 420,379.92
$ 432,150.56
$ 444,250.77
$ 456,689.79
$ 469,477.11
$ 482,622.47
$ 496,135.90
$ 510,027.70
$ 524,308.48