Just discovered your channel, a game changer for me as struggling student ❤
@kavishkagimhani9803
24 күн бұрын
Thank you, Professor. I have gained a thorough understanding of the material I sought to learn. It's very clear. I would be grateful if you could continue to guide and teach us with your invaluable expertise.
@spiralsausage
5 ай бұрын
thank you so much. I'm taking the ACA and learning from textbooks and a provider that doesn't explain the logic behind anything and give you a formula and say go run and do your thing. The way you explained this was perfect!
@charanjeetkaur23
2 жыл бұрын
The concept is explained properly within such a short period. Great job and thank you so much.
@EpochIsEpic
2 жыл бұрын
Exactly what I was looking for, you're a life saver!
@shehancooray4858
4 жыл бұрын
This video was so helpful, thank you so much. Huge respect.
@TryAthletic
3 жыл бұрын
Thank you, for you concise explanation- Drawing the second time line it clicks instantly.
@KTs236
2 жыл бұрын
Most practical and easy to understand way of teaching. Thanks 👍
@ritafloww
3 ай бұрын
That was soooo helpful, thank you! You explain good!
@nupurpadhi95
10 ай бұрын
Super helpful!
@sweeer2881
2 жыл бұрын
hahah thank you bro, literally saved my exam, hopefully i will be able to get an C now in corporate finance
@PB-PB-PB
2 жыл бұрын
Atif, you did such a good job of explaining this to all viewing students. Thank you so much! It helped me grasp my homework material better.
@PocketAces0119
2 жыл бұрын
Just leaving a comment to help with the algorithm. Great video, helped me visualize a concept I just couldn't wrap my head around for an online class. This video is going to be my lifesaver for my midterm. Thanks!
@Toxhika
3 жыл бұрын
Thank you Mr Atif, concise and clear explanation
@arceuslee7087
11 ай бұрын
Allah apko khush rakhay bhai. Bht help hui meri
@kaylah9643
4 жыл бұрын
thanks for making this, they're very useful for me to prepare my exams.
@tiffanyyu1479
3 жыл бұрын
Thank you so much! Your video was so clear and helpful, helped me loads with understanding my lecture today!!
@imSkitz
9 ай бұрын
thank you! my exam is tomorrow and this helped a lot
@pearleocean
Жыл бұрын
Thanks so much for clear explanation. This is very helpful to prepare for my Cfa
@olycollier8048
10 ай бұрын
Great video 👍👍
@hasscross3571
2 жыл бұрын
It is very helpful. Thank you so much!!
@johnchou5421
3 жыл бұрын
Incredible video, thank you.
@khenkhen08
3 жыл бұрын
Thank you sir. This video is so helpful.
@ayeshindika7762
3 жыл бұрын
a vary goo explanaiton.got the all important points
@professorikram
3 жыл бұрын
Thanks AIK. Please also check out www.SimpliTaught.com. I have created this website (it’s free!), with lots of textbook-specific content.
@DuyguKarakanSen
3 ай бұрын
Thank you for this! How about when the annuity actually grows? How do we introduce the growth rate to this calculation?
@alexandriarinaldi1070
3 жыл бұрын
thank you, this was so helpful!
@adityaprasaddhal2462
3 жыл бұрын
thanks a lot man, for saving my f*cking exam
@nehanawaz1556
Жыл бұрын
thanks
@mizeh8387
Жыл бұрын
WOW!! This was so helpful ❤️
@oliverhunt5750
2 жыл бұрын
Thanks so much!
@maskedhonour8392
Жыл бұрын
Thank u sir, Ur a life saver
@edwardpotter4930
Жыл бұрын
Living legend
@jennifervu8013
3 жыл бұрын
THANK U KING
@purplebeast6836
4 жыл бұрын
respects, makes sense now
@KingLamarQuinton
4 жыл бұрын
THANK YOU!!
@uctran3455
4 жыл бұрын
thank you so much
@GRim0746
3 жыл бұрын
THANK YOU
@RAJACENA1996
3 жыл бұрын
Thanks. What would be the modifications to this be if it is compounded semi-annually?
@professorikram
3 жыл бұрын
Good question. So that depends on whether the cash flows are semi-annual or not. If you are receiving the cash flows semi-annually as well, then nothing changes - you would discount semi-annual cash flows at the semi-annual rate. For instance, if the question says "you will receive $500 every 6 months, and the annual interest rate is 6% compounded semi-annually.." then you would discount the $500s at 6%/2 = 3%, which is the semi-annual rate, and that's it. On the other hand, if cash flows are ANNUAL, and the APR is 6% compounded semi-annually, then you would first need to convert your APR (6%) into an EFFECTIVE ANNUAL RATE (EAR). I have a separate videos on how to do that. This number will be greater than 6%, and you will use this number to do your discounting. Hope this helps my friend.
@adhiljamal9350
3 жыл бұрын
Thank you
@kaurgill1282
4 жыл бұрын
How do we find the delayed annuity for semi annual question? Also if the interest rate is compounded monthly?
@professorikram
4 жыл бұрын
Hi Kaur - That's a great question. The key is to make sure that the timing of the cash flows and the interest rate are consistent with each other. In other words, annual cash flows need to discounted at the EFFECTIVE annual rate, semi-annual cash flows need to be discounted at the EFFECTIVE semi-annual rate, and so on. Let me give you 2 examples: Example 1: Let's suppose you will receive $100 every YEAR for the next 5 years (so 5-year annuity, annual cash flows), and the interest rate (APR = 6%) COMPOUNDED SEMI-ANNUALLY. In this case, when you wait one year for the first $100 to come in, you are not just losing 6%/12 = 0.5% every month. Rather, you are also losing interest on that interest income (compounding effect). So, technically, as you are waiting one year for $100 to come in, EFFECTIVELY you are losing MORE THAN 5%. To determine the appropriate rate, you need to figure out your EFFECTIVE ANNUAL RATE, which is (1+6%/12)^12 - 1 = 6.1678%. So you will calculate the PV of this $100 annuity using 6.1678% as your discount rate. Example 2: Same as above, except that you will receive $100 every 6 months for the next 5 years; interest rate is still 6%, compounded monthly. In this case, you need to figure out the EFFECTIVE SEMI-ANNUAL RATE that is consistent with the SEMI-ANNUAL cash flows. And the key, again, is to realize that as you wait 6 months for the first $100, you are not JUST losing 3% interest rate (6%/2); rather, because interest is compounding MONTHLY, you are losing MORE than 3%. How much, exactly? You do the same thing as in Example 1 above, but now only compound the monthly rate SIX times - meaning EFFECTIVE SEMI-ANNUAL RATE = (1+6%/12)^6 - 1 = 3.0378%. The KEY is to make sure that the timing of the cash flows is ALIGNED with the appropriate EFFECTIVE RATE. I am glad you asked this question. I'll make a separate video on this too. But hope this illustration helps!
@arunhasriram5977
2 жыл бұрын
What is the present value of the annuity of $588.06 if you have to wait an additional year for the first payment? so waiting for the additional year for the first payment also mean the delayed annuity-like the concept you just explained? someone who knows pls reply
@suelow7603
2 жыл бұрын
So, if your savings only has one payment, and that payment is delayed by two years, you would use an exponent of 2 and still come up with the correct answer for PV?
@professorikram
2 жыл бұрын
If I understand your question correctly, then yes, you’re right.
@johaanthomas2105
4 жыл бұрын
Hello sir could you make a video for present value of deferred annuity due. I have a doubt regarding the time as in your video for present value of an ordinary differed annuity we take T-1 years. Do we do the same for present value of deferred annuity due
@professorikram
4 жыл бұрын
JOHAAN THOMAS if an annuity due is deferred, then you will need to discount it back by T years, not T-1, as is the case with the “ordinary” deferred annuity. Thanks for pointing it out; I’ll try to make a supporting video to illustrate this point. Cheers!
@leewenjian4608
2 жыл бұрын
Good day sir, I got a question to ask Jamila wishes to provide $500 pocket money to her son every month when he turns 17 for 5 years. Her son is now 12 years old. If she can earn interest of 12% pa compounded quarterly, how much does she need to invest today to provide these payments? I dun have idea on it could sir help me pls thanks
@professorikram
2 жыл бұрын
Hey Lee. Sorry for the delayed response. This is a tricky one, since payments are monthly and compounding is quarterly. Rather hard/time consuming to explain in writing. But I'll try to make a video on this separately.
@johannal7988
2 жыл бұрын
Is there an excel sheet template for this calculation ? Or an online calculator ?
@professorikram
2 жыл бұрын
No, not to my knowledge.
@maheshkwagh2417
4 жыл бұрын
Tyty
@jaelualec3932
3 жыл бұрын
Hey, sorry. I don't understand how you managed to get 3001.02 from the PV formula. Little help?
@professorikram
3 жыл бұрын
Hi Jaelu - Sure. In this example, C = 500, r = 0.04, and T = 7. So, PV = 500 x ( [1 - (1/(1.04)^7] )/(0.04). 1.04^7 solves to 1.3159, and 1/1.3159 = 0.759918. So, PV = [500 x ( 1- 0.759918) ] / (0.04) --> PV = 500 x (0.240082/0.04) --> This math should give you $3001.02.
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