Today’s value of a cash flow that is to be received at some point in the future PV phần thu nhập mất đi do đã không

Present value vs Future value

lựa chọn một cơ hội đầu tư khác. Discount rate used to discount cashflows in future to PV
The amount to which a current deposit will grow over time FV
Opportunity cost forgo by choosing a course of action

Annual compounding
Required rate of return minimum rate must receive to accept the investment Nominal r.f = Real r.f + IP

Required ROR = nominal r.f + RP

Real risk-​free rate
Nominal risk-​free rate
Periodically compounding Lump-​sum (single cashflow)
Inflation premium (IP)

Components Default risk premium -> Required rate of return = Real risk-​free rate
+ Inflation premium + Default risk premium +
Continuously compounding Interest rate Liquidity premium + Maturity premium
Types of cashflow Premiums (compensate for bearing risk) Liquidity premium
R1: Time value of money

Maturity premium
Types of cashflow (GIÁ TRỊ THỜI GIAN CỦA TIỀN)

first cash flow (PMT) that occurs one period Ordinary annuity
from now (t1)
no reinvestment of interest
same interest overtime
Simple interest
increasing interest overtime
based on principal amount
first cash flow (PMT) that occurs immediately (t0) Annuity due
Annuity (Series of equal cashflow)

reinvestment of interest

first cash flow (PMT) that occurs one period from Compound interest
now (t1) Perpetuity based on principal amount + accumulate interest

never-​ending sequential cash flows

NPV Effective annual rate (EAR) the rate investors actually realize as a result of compounding
(lãi suất thực hưởng)
Periodically compounding Type something
Type something Series of unequal cashflow

m→∞
Continuously compounding
Type something

Usage: The cash flow additivity principle can be used to solve problems Cashflow additivity rule
with uneven cash flows by combining single payments and annuities.
(quy tắc cộng dòng tiền)