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FINANCIAL MARKET COURSES

FX Forward Market - Calculating Swap/Forward

FX Forward Market - Uses of Outrights & FX Swaps

FX Forward Market - Short-Dated Outrights & FX Swaps

FX Forward Market - Cross-Currency Borrowing

FX Forward Market - FX Swap Trading

FX Forward Market - Non-Deliverable Forwards (NDFs)

Foreign Exchange - Factors Influencing Exchange Rates

Scenario - Using FX Swaps & Outrights for Cash Flow Management (New)

Equities - Research & Valuation

Equities - Returns-Based Valuation

Equity Portfolio Management - Risk & Return

Equity Portfolio Management - Indices & Hedging

Japanese Equity Market

Caps & Floors - An Introduction

Caps & Floors - Chooser & Double-Strike Structures

Securitization - An Introduction

Securitization - Mortgage-Backed Securities (MBS)

Securitization - European Mortgage-Backed Securities

Securitization - Commercial Mortgage-Backed Securities

Securitization - Asset-Backed Securities (ABS)

Securitization - Credit Card ABS

Corporate Finance - Measuring Business

Corporate Finance - Measuring Business

Corporate Finance - Cost of Captial

Treasury - Dealing Room Organization & Practices

Treasury Management - The Treasury Department

Treasury Management - The Finances of a Bank

Asset & Liability Management (ALM) - An Introduction

Asset & Liability Management (ALM) - Interest Rate Risk

Asset & Liability Management (ALM) - Options, FTP, & Firm Value

Analysis of the Income Statement

Analysis of the Cash Flow Statement

Risk Management - An Introduction

Risk - Measurement & Management

Interest Rate Risk - Identification & Measurement

Interest Rate Risk - Management

Market Risk - Identification & Measurement

Market Risk - Management & Regulation

Liquidity Risk - Identification & Measurement

Liquidity Risk - Management & Regulation

Counterparty Credit Risk (CCR) - An Introduction

Counterparty Credit Risk (CCR) - Measurement

Counterparty Credit Risk (CCR) - Management

Operational Risk - Identification & Measurement

Operational Risk - Management & Regulation

Credit Risk Measurement - PD & Risk Rating

Credit Risk Measurement - EAD & LGD

Credit Risk Customer Management - An Introduction

Credit Risk Customer Management - Credit Facilities

Credit Risk Customer Management - Structuring Credit Facilities

Credit Risk Customer Management - Covenants & Credit Decisions

Role of a Custodian in Trade Processing & Settlement

Corporate Actions - An Introduction

Commodities - An Introduction (Revised)

Commodities - Trading (New)

Commodities - Electricity & Coal

Commodities - Grains & Oilseeds (New)

Commodities - Livestock (New)

Commodities - Softs (New)

Banking Regulation - An Introduction

Basel III - Liquidity & Leverage

Financial Authorities (UK) - PRA & FCA (New)

Financial Authorities (UK) - Bank of England (New)

Financial Authorities (Europe)

Markets in Financial Instruments Directive (MiFID)

Primer – MiFID II/MiFIR (New)

Foreign Account Tax Compliance Act (FACTA)

European Market Infrastructure Regulation (EMIR)

Undertakings for Collective Investment in Transferable Securities (UCITS)

Islamic Banking & Finance - An Introduction

Islamic Banking & Finance - Financial Instruments

Market Efficiency - The Concept

Market Efficiency - The Evidence

Portfolio Theory - The Markowitz Model

Portfolio Theory - Single-Index & Multi-Index Models

Portfolio Theory - The Capital Asset Pricing Model (CAPM)

Portfolio Theory - Arbitrage Pricing Theory (APT)

Understanding Private Wealth Management Business

Private Wealth Management - An Introduction

Private Wealth Management - Clients

Private Wealth Management - Ultra-HNWIs &

Private Wealth Management - Client Investment &

Private Wealth Management - Client Acquisition & Relationship Management

Private Wealth Management Products & Services

Exchange-Traded Funds (ETFs) - An Introduction

Exchange-Traded Funds (ETFs) - Types

Primer – Smart Beta (New)

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Time Value of Money

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. Similarly, a cash flow today has a value in the future known as the future value. Present value and future value are determined by the interest rate and the time period elapsed. They are crucial concepts in finance. For example, the price of a bond is the sum of the present value of all the cash flows expected to be generated by the bond in the future, the mark-to-market value of an interest swap is the sum of the present values of all the cash inflows and outflows from the swap in the future, and the value of an option is the present value of the expected payoff of the option at the exercise date.

This course describes the concepts of present value and future value, and the relationship between them. It is essential for understanding the way in which securities and derivatives are priced, and how decisions are made in financial markets.

OBJECTIVES

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

• Calculate the future value of an investment for a given present value and a given interest rate

• Recognize the relationship between the present value, future value, and discount factor

• Calculate the value of a perpetuity and an annuity

• Use the present value and future value formulas to solve for an unknown rate or number of periods, and distinguish between nominal and real interest rates

COURSE OUTLINE

Topic 1: Future Value

• Future Value & Time Value of Money

• Future Value – Example

• Future Value – Simple vs. Compound Interest

• Future Value – A Historical Example

Topic 2: Present Value

• Calculating Present Value from Future Value

• Present Value – Continuous Compounding

• Present Value – Continuous Compounding – Example

• Present Value of Multiple Cash Flows

o Example 1

o Example 2

Topic 3: Perpetuities & Annuities

• Definition of an Annuity & a Perpetuity

• Valuing Perpetuities

• Valuing Perpetuities - Another Example

• Valuing Annuities

• Valuing Annuities – Example

• Annuities – Calculating Future Value

• Relationship between Perpetuities & Annuities

• Relationship between Perpetuities & Annuities – Example

Topic 4: Present Value & Future Value – Other Considerations

• Solving for the Interest Rate and the Number of Periods

• Solving for the Rate

• Solving for the Number of Periods

PREREQUISITE KNOWLEDGE

Interest Calculations - View Now

ESTIMATED COMPLETED TIME

60 Minutes

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NPV & IRR

The purpose of this course is to provide a framework for analyzing alternative investments. Using the fundamental concepts of present value and discounting, it is possible to evaluate most kinds of financial assets and liabilities in the common framework of net present value, or NPV.

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