Money and Banking: Lecture 7 - Interest Rates and Present Value 2

[@zialelouche8012]

thank you sooooooooo much to this professor!!i live miles and miles away and those videos just gave me hope and the willingness to continue doing business and economics!!so i'm gratefull to the university and the people who had the idea of submitting those videos!!

[@dosomething3]

So here is the algorithm: How to decide if a bond is worth buying: . Figure out the riskiness of the business . Convert the riskiness to an interest that you would be willing to lend your money out to this business at the aforementioned risk. . Calculate the total return on the loan at present value using P=F/(1+i)^t for each payment. . The present value of the bond is: P . If you can buy the bond for up to P then buy it. Otherwise, don't.

[@希澈金-s8b]

Best explanation ever

[@atulsingh7539]

Which book is being followed here? Thank you 👍 Anyone

[@zialelouche8012]

my only hope now is seeing more subject discussed here.

[@xuebolai4468]

I agree with Brandon. It should be 91.3

[@ronaldmad]

You can use discounting with bonds...i doubt you can use with stocks..better to go with p/e ratio and roe

[@dosomething3]

P=F/(1+R)^t The present value is equal to the future value discounted.

[@dosomething3]

P=Sum[from t=1 to t->infinity] P/(1+i)^t=F/i

[@yerpyaboy]

91.34 not 88.35

[@egpalomo]

1 divided by infinity is zero.. so F/infinity is equal to zero.

[@qsa-gc]

31:46 "what am I paying you for..."

[@AlexPalios]

I think the math don't match up again, the sum of the geometric serious is wrong, as well as the formula showed before that..

[@joshais1654]

What’s the correct formula