# math after the 3 exams

### 19 terms by ezekielfreak

#### Study  only

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PVrt

### INT

The annual interest paid to you

### PVrt

The PV stands for the investment
The R is the interest
The T is the amount o fyears

### FV

Is the Future Value or
PV + INT
or
PV (1+rt)

### FV as function of time T

PV + (r*PV) T
ex:
FV=5000 + 400T
you can graph this

### Simple Interest Growth

This is a linear function of time, with intercept given by the present value and slop given by annual interest

### Bridge Loan

A short term loan

Selling Bonds

### When a bond matures it

returns the original investment to the investor

2 years

### An investment earns 5% per year and is worth \$1,000 after 9 months. Find PV (or the investment)

The way to do this problem is by using only the
FV= PV(1+rt)
1000=X(1+(.05 * 9/12)

### If we know the future value (FV) but not the present value (PV) what do we do

PV = FV / (1+ RT)

### The "Maturity Value" of a T(Treasury) Bill

This is the amount of money it will pay at the end of its life, that is, upon maturity

### How much will a T-Bill sell for if it has a 5% discount rate and it is a 1 year 10,000 dollars bill.

It will sell for 9500 because you subtracted 5% of %10,000 from \$10,000

### If the bill is 10,000 and you have a 6 month bill which is half of 12 months (1 year) and the discount rate is 5% then

you cut the 5 percent in half to 2.5% and discount the 10000 with that which is \$9,750

So if it is 3 months then you multiply the Month / year times the discount rate to find out the actual selling price discount rate.

### For Compounded the formula is

FV=PV((1+(r/m))^MT
or
PV=FV / ((1+R/M))^MT

To find M, know that M is how many times per year so if the question states, "Compounded Anually" it is only 1 year so M is 1

### Market System

Private ownership of resources and the use of markets and prices to coordinate and direct economic activity

### break even point

an out put at which a firm makes a normal profit but not an economic profit.

### Profit

Profit = P - A X Q

Example: