August 2004
Intermediate to advanced
656 pages
15h 28m
English
Notice again how the formulas vary depending on whether you are calculating forward from a known present into an unknown future or you are calculating backward from a known, desired future into an unknown present situation. The formulas also vary depending on whether the cash-flow stream is a single-payment amount or equal-payment-series amounts. The decision process in Figure 5.10 can help you decide which interest formula to use in any given situation.
If you already have, or can visualize, the cash-flow diagram for the situation, you can also simply match it to the generic cash-flow diagrams in this chapter to find the appropriate interest formula.
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