After studying this chapter you should be able to

• Calculate the future value to which money invested at a given interest rate will grow.
• Calculate the present value of a future payment.
• Calculate present and future values of streams of cash payments.
• Find the interest rate implied by the present or future value.
• Understand the difference between real and nominal cash flows and between real and nominal interest rates.
• Compare interest rates quoted over different time intervals-for example, monthly versus annualrates.