Present Value 3 | Interest and debt | Finance & Capital Markets | Khan Academy

[@PhilipK100]

Sal, I've learned more from your videos than I ever did in my five years of Business studies in College - Thanks Philip (Northern Ireland/U.K)

[@depressivepumpkin7312]

Philip, how is your business going, mate?

[@kirtibata6675]

it's 2107 and still amazing. i cant thank you enough for uploading

[@vishwajeetmishra9210]

Ohhhh you live in 2107 great 😁😁

[@vishwajeetmishra9210]

U r time traveller

[@tatewilliams3498]

Pardon

[@jadenreginald8991]

You probably dont care but does any of you know of a method to log back into an instagram account? I was dumb forgot the password. I love any assistance you can give me!

[@Seraphim262]

@@jadenreginald8991 It depends on how you created your account. Just try to log in normaly, you will recive an error message and a new hyperlink "forgot passwort?" you click on this link and follow the instructions. Now after I told you this much, if you have specific questions dont ask them here. Try asking a search engine with your question or speak to real people. This is an easy question and there will everywhere be people enough to answer this. Dont ask your questions in the void and wait one month untill a stranger finds it by luck.

[@galibahmedchowdhury4405]

Hi, I am from Bangladesh. Feeling blessed that you have developed these contents for everybody.

[@activefinance1]

Informative content For Finance I'm learning since long time ago and learning a lot from this and start my on channel

[@okeekpagha2126]

This was slightly confusing. But it makes sense that choice 2 would need a bigger principal to make the same amount of (compounded) interest at the end of the 2nd year.

[@spinach7205]

2020 you are gold.

[@divermike8943]

Great presentation. But here is what I don't get is scenario 3. If you take the discounted rate 99.365 and invest it at %5 for two years you don't get back to what you had before discounting, unlike scenario 2. In scenario 1 100 if invested at 5% interest compounding each year will be worth $100.25 in 2 years. Got it. Scenario 2: $110 given in year 3 is like getting $99.77 now and then investing it at 5% compounded annually. Running that scenario forward from $99.77 gives 99.77*105=104.76 after one year and in year 3 104.76*1.05=110. Right back where you started before discounting. Great. But scenario 3: 20+50+35=105. But if you start right now with the discounted 99.365 and compound it forward in time you get 99.365 +.05*99.365=99.365*1.05=104.33 1 year later in year 2. 2 years later in year 3: 104.33*1.05=109.55 > 20+50+35=105. Huh? Unlike scenario 2 starting with the discounted amount you don't get back to the final amount of money in year 3. What am I missing?

[@vuyiswaqekiso9709]

2019 Still helpfull

[@suryavoroy3527]

Excellent video

[@zahra225512]

Hey sal, you said that this is "compounding" forward and "discounting backwards, but the way we calculated the year3 values in the previous video was by the formula: PV(1+2r)=100(1.1)=110 which is the normal way of finding the uncompounded future payment with annual interest. However if it had been compounded then it would be =100(1.05)^2=110.25. So why do you call the first choice future payments as compounded?

[@MrGautam2384]

Great videos

[@drifter2341]

Very clear.

[@ApplianceRepairOfTucson]

god bless you !!! thanks

[@zahra225512]

hey sal you just said in the beginning that this was "compounding" forward and "discounting" backwards. But when we calculated year3 values in the previous video we used the formula =PV(1+2r)=100(1.1)=110 which is the normal payment two years after with "UNcompounded" interest rate. Had it been compounded then we would use the formula =PV(1+r)^2=100(1.05)^2=110.25 which gives adifferent answer. So why do you call this "compounding" in this case?

[@AKU-in3tu]

please! add russian subtitles

[@rudyelsierra8729]

fun enuf to refresh the knowledge..btw risk free rate isnt it often called by obligation rate which it issued by govt?

[@cunui2]

if a person does say he will give you $100 now or $110 in year. How will you find the present value? Will it depend on inflation and/or prices of goods to income ration?

[@learn905]

I think you left out a 5 in the 3rd column that would of made it 107.66 which was more than the 2nd column I may be wrong though

[@andrew1996128]

u have helped me a lot

[@haseebahmed07518]

man i wish we have teachers lyk u in our school :)

[@santyias87]

@cunui2 its based on the discount rates that the federal reserve maintains and controls

[@dragonworld2008]

Go Sal go Sal .He's the math wiz .Me doing Sal : you take to million times to billion divided one by one percent what you class . they like what is he talking about ? he he he

[@parthyadav4907]

watching it in 2024 ...

[@PhillipWolff]

5% rate?! He must be going off of 2007's numbers haha. What's it today? Like .01%?

[@timothysamuel6307]

Why am i lending to the govt if they're capable of giving me

[@thegoonist]

can someone tell me why cant we work in forward terms? i find myself subconsciously calculating the interest rates forwards instead of backwards and finding the PV. i mean, essentially both achieve the same aims of finding which option is the best so i dont see any real advantage of finding the PV over the final value? unless there are other reasons that sal hasnt explained?

[@tomcotter4299]

By starting everything in the same year (the present) you can compare apples to apples. Say you want to know what each choice would look like in 10 years. You can find the present value of each option and then find the future value of each of those numbers 10 years from now. It’s simpler than doing the future value of 10 years for one, the future value of 7 years for another, and three different future values for the third choice.

[@Rus1310CMRS]

2023. IIT Madras.

[@timmypompom4810]

What about inflation? That will make the $100 today have less buying power 2 years out.

[@ionuorah]

@PhilipK100 % 5 years? where your sleeping during lectures or what?

[@dragonworld2008]

number lines , slope , exponents ,the introduction of sugar passing trow a cell . how many hearts a earth worm has , do babies really come from France ha ha ha

[@dragonworld2008]

Sal you need to have more babies , so we can have more smart people in the world =)

[@magikarp2285]

Hey Sal, you lost me at some point....

[@dragonworld2008]

I learn nothing from this . Bring on the real stuff . Algebra 1,2,3,and word problems ,fractions ,division ,Multiplications .Algebra 118 the real math . cube square triangles