📘 Chapter 6: Time Value of Money Part II
🧮 All-in-One TVM Calculator
Open All-in-One Calculator ↗FIN301 reference for FIN509. Solve PV, FV, PMT, NPER, RATE, NPV/NFV, and APR/EAR. See the math, Excel formulas, and timelines.
🧮 Original TVM Calculator
Open Original TVM Calculator ↗The calculator used in class. Practice time value of money problems and check your calculations as you work through the chapter.
📽️ Chapter 6 Slides (PPT)
Inline viewer uses the Office web viewer. If your browser blocks it, use the buttons below.
RATE()), that field is marked (solve). Composite formulas show inputs as — and provide the Excel line + answer.
Quick Guide: New Variables & Rates
Chapter Add-OnsPMT (Payment): Use Excel PMT() with (rate, nper, pv, [fv], [type]). Distinguish between Ordinary Annuity (type=0) and Annuity Due (type=1).
Ordinary Annuity (type = 0)
Blue marker jumps at the end of period t ⇒ Excel type=0.
Annuity Due (type = 1)
Pink marker jumps at the beginning of period t ⇒ Excel type=1.
APR — Annual Percentage Rate
Nominal yearly rate; does not include compounding, so typically APR ≤ EAR. Monthly rate = APR/12.
Excel (APR → EAR): =EFFECT(nominal_rate, npery)
EAR — Effective Annual Rate
Right annual return incl. compounding. If APR compounded m times/yr: EAR = (1 + APR/m)^m − 1
Example: APR = 12%, monthly (m=12) → EAR = 12.68%. Excel: =EFFECT(12%, 12)
(Reverse: APR = m * ((1+EAR)^(1/m) − 1). Excel: =NOMINAL(EAR, m))
🚀 Use the JU NPV / NFV Calculator for These Questions
Recommended ToolFor the NPV / NFV questions in this chapter, use the JU calculator here:
What it helps you do
- Compute PV today from a stream of future cash flows.
- Compute NFV / value at a target year by compounding the PV forward.
- Check your Excel work on questions using
NPV(),FV(), and mixed cash-flow timelines. - See clearly how the same cash flows connect across PV today and future value later.
Use it especially for
ICE: Q1, Q2, Q3, Q4, Q5, Q8, and Q30
Idea: Enter the cash flows by year, compute the NPV/PV today, then compare that to the NFV at the target year.
Go to the calculator →Quick Cheats: NPV, NFV, EFFECT/NOMINAL, type
- NPV vs PV:
NPV(rate, CF1..CFn)discounts t=1..n. If there’s a time-0 cash flowC0, doC0 + NPV(...). PV today = result of that expression. - NFV (value at year T):
NFV = FV(rate, T, 0, -NPV(rate, CFs), 0)(or compound the PV to year T). - EFFECT/NOMINAL: EAR from APR with m compounding:
=EFFECT(APR, m). APR from EAR:=NOMINAL(EAR, m). - Annuity timing:
type=0= END (ordinary),type=1= BEGIN (due). Due has one extra compounding each period.
🔗 NPV / NFV Sandbox: https://www.jufinance.com/nfv/
30 TVM In-Class Exercises Explained | Annuities, Loans & Excel | FIN509 Chapter 6
Watch the trimmed in-class exercise walkthrough below. Follow along with all 30 ICE questions, pausing to try each problem yourself.
Homework — Chapters 5 & 6
Written answers are hidden. Open each “Hint” for the exact Excel function and inputs, and use the homework video below for the walkthrough.
TVM Homework Explained | All 24 Questions with Excel | FIN509 Chapter 6 Part 2
Homework walkthrough for all 24 questions, with Excel explanations. Use the hints below to set up each problem, then watch the video to check your approach.
🎥 Quiz 1 Help Videos
Use these three videos for extra help with Quiz 1.