Accounting: Time Value of Money

1. future value of a lump sum

1.1. FV=present value * future value factor (i,n)

1.2. adjustment to interest rate: i * #of compounds per year

1.3. adjustment to time period: n * #of compounds per year

2. future value of an ordinary annuity

2.1. FV=payment * FV annuity factor (i,n)

2.2. when the compounding frequency increases, the FV increase

3. present value of an ordinary annuity

3.1. PV= payment * PV annuity factor （i,n)

4. present value of a lump sum

4.1. PV= future value * present value factor (i,n)

4.2. discounting

4.3. PV=FV / future value factor

5. future value of an annuity due

5.1. FV=payment * FV annual factor * (1+i)

6. pv of an annuity due

6.1. pv= payment * pv annuity factor * (1+i)