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Learn how to estimate the current value of a company based on projected future cash flows adjusted for the time value of money. See the basic formula, a worked example, and modifications for different contexts and sectors.
Net present value (NPV) is a way of measuring the value of an asset that has cashflow by adding up the present value of all the future cash flows. NPV is used to evaluate and compare capital projects or financial products with cash flows spread over time, and it depends on the time value of money and the discount rate.
Discounted cash flow (DCF) is a method to value a security, project, company, or asset based on the time value of money. Learn the main elements, history, mathematics, and applications of DCF analysis in finance and economics.
Learn the concept of time value of money, which is the idea that receiving money now is better than later. Find out how to calculate present and future values, annuities, and interest rates using formulas and examples.
Learn how 30/360 methods calculate interest accrual for bonds and loans based on 30-day months and 360-day years. Compare different variations of 30/360 methods and their adjustment rules for US and European markets.
Discounting is a mechanism in finance that allows a debtor to delay payments to a creditor in exchange for a fee. The fee is based on the discount rate, which is the rate of return the creditor could earn on a similar investment. Learn how to calculate the present value and the discount factor of future cash flows.
Learn how actuaries use symbols to express mathematical formulas involving interest rates and life tables. See examples of notation for annuities, discount factors, present values, and life expectancy.
An amortization schedule is a table showing each payment on a loan, with interest and principal breakdown. Learn about different methods of amortization, assumptions, and examples of amortization schedules.