The following cash flow diagram shows a loan from the lender's point of view:

Cash flow diagrams also specify when payments occur rela- tive to the compound- ing periods.The diagram to the right shows lease pay- ments at the begin- ning of the period.

This diagram shows deposits (PMT) into an account at the end of each period.

Time value of money (TVM)

Time-value-of-money (TVM) calculations make use of the notion that a dollar today will be worth more than a dollar sometime in the future. A dollar today can be invested at a certain interest rate and generate a return that the same dollar in the future cannot. This TVM principle underlies the notion of interest rates, compound interest, and rates of return.

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HP Prime Graphing NW280AAABA manual Time value of money TVM