Part Two Valuation

Chapter 3 Time Value of Money

Learning Objective：

After studying this chapter, you should be able to：

·Understand the concept of time value of money.

·Understand and solve problems involving simple and compound interest.

·Calculate both future and present value of single amount cash flow and a stream of cash flows.

·Understand annuity and perpetuity, calculate their future and present value, and master their application.