Outlines of Key Concepts

The Four Basic TVOM Formulas

Present Value of Single Sum - An overview of basic PV calculations with respect to a single sum.

Future Value of Single Sum - An overview of basic FV calculations with respect to a single sum.

Present Value of an Annuity - An overview of basic PV calculations with respect to an annuity, a series of periodic payments.

Future Value of an Annuity - An overview of basic FV calculations with respect to an annuity, a series of periodic payments.

Annuity Due - Timing of payments: beginning or end of the period.

The Miracle of Compounding - The impact of frequency and term on the effect of compounding.

Continuous Compounding - - Derivation of the continuous compoundinng formula.

Interest Rates - Factors effecting the choice of interest rate.

Cash Flow Diagram - How to construct a cash flow diagram to assist with solving TVOM problems.

Assumptions and Definitions - List of assumptions underlying TVOM calculations and basic TVOM definitions.

Loan Amortization - An example of amortizing a loan using an Excel spreadsheet

Copyright © 2002-2008 by David R. Frick & Co., CPA