# TVM equations

like i said, I am ramping hard into this section tonight, some biggies to keep on the back burner EAR (EAY) PIR BEY geometric CAGR HPR add more, fellas!!!

what are PIR and CAGR?

key words contribution = a PV given to you, dont forget ot CHANGE SIGN function on your calc how much worth ====> find the FV

CONTINUOUS COMPOUNDING – 3 steps order matters: FV = PV(e^[rate * n) do n * rate first then hit e ^ X function on HP12c then take what you get there and multiply it by your PV. answer = FV

EAR = EAY SAME THING EAY = ( 1 + r) ^ n - 1

daj224 Wrote: ------------------------------------------------------- > key words > > contribution = a PV given to you, dont forget ot > CHANGE SIGN function on your calc > > how much worth ====> find the FV CAGR = (END VALUE/BEG VALUE) ^ N - 1 SEE VOLUME 1 PIR = periodic interest rate if you get an 8% rtn paid seminannually, your PIR is 4%

retirement plans, think annuities, think PMT function your calculator.

dont forget to change sign when it is a cash OUTFLOW.

HPR= P1 - P0 +CF1 /P0 HPR for a portfolio: (Vt /Vt-1)-1 MWRR= IRR TWRR= Geometric mean

college savings problems are a BITC\$\$ make sure to adjust N example my daughter penelope wants to go to school one day. I am saving, and I know I will get 100,000 in 10 years. but she starts school in FOUR years I can get 8% on my \$ what is PV of that 10 G ? draw a time line. you are discounting the 10K not at 10 or 4 yrs but at 6 !!! on your HP12c: n = 6 FV = 10000 i = 8% PV = 63,017

annuity due/ordinairy don’t forget to change function on HP, I still forget sometimes. typical in lump sum vs lottery annuity payout questions

heha168 Wrote: ------------------------------------------------------- > what are PIR and CAGR? CAGR = geometric mean return of many years, or in other words, average annual return. I don’t know what is PIR

I think of continuous compounding equation as P=e^rt, used this in HS, like the shampoo, Pert Plus…

amberpower Wrote: ------------------------------------------------------- > I think of continuous compounding equation as > P=e^rt, used this in HS, like the shampoo, Pert > Plus… PERT, thanks, i like that