Overview

This eCourse consists of three modules. Module 1 describes the concepts of present value and future value, and the relationship between them. In financial markets, there are many examples of cash flows that occur at some point in the future but which need to be evaluated today. A cash flow in the future has a value today called the present value.

Module 2 introduces the fundamental concepts of annuities and perpetuities in finance. It explains how annuities are valued, how to calculate their present and future values, and how to apply these concepts using formulas, Excel, and practical examples.

Module 3 explores how the time value of money and its related concepts of present value and future value impacts investment decision making.

Objective

On completion of this eCourse, you will be able to:

- Recognize the relationship between the present value, future value, and the discount factor
- Calculate the future value of an investment for a given present value and a given interest rate
- Recognize the importance of annuities in finance and how they are valued
- Calculate the present value of a perpetuity

Content

Module 1: Present Value & Future Value
Topic 1: Time Value of Money
Topic 2: Future Value
Topic 3: Present Value

Module 2: Annuities & Perpetuities
Topic 1: Annuities
Topic 2: Perpetuities

Module 3: Time Value of Money Scenario