thank you so much for such a high level of simplication of concepts. It is all so complicated elsewhere in other materials. I wish I came across this channel earlier.
Dear IFT fan & follower. Thank you for your kind words. We are really pleased that you are able to benefit from IFT UA-cam videos. Be sure to Like the videos; share IFT videos within your social media circles; Like the IFT FB page (facebook.com/CFA.Trainer). Please also join Analystforum.com where we will be most grateful if you can show your status as “Studying with IFT”. Thank you! - IFT Support Team
Instead of using brute force for the unequal cash flows calculations, what I find highly effective is inputing every single casflow to CF function and then computing NPV using relevant discount rate. The result is NPV at time 0, so all that has to be done is to compute FV based on that.
All has been okay up until this point - thank you kindly @IFT. However, I am a bit stuck on calculating FV for unequal CF. I believe the method mentioned by yourself, Barrtlomiej, is what I need to do. When I enter CFs, 10pc for i, and then compute for FV, I get 0.00... When I repeat the process and compute for NPV, I get 10,652.59.... I am using HP 12c. Perhaps you are using BAII but can you please explain Bartlomiej?
I have a quiry with regard to ordinary annuity I thought the formula was A{(1+r)^-n }-1/r. Could u kindly clarify? I could be wrong. I am not sure why to the power of is not a minus. You are powering it with a positive? Kindly assist.
Dear all, why don't we take geometric mean of 10% in order to get the period rate but rather divide by four? Wouldn't geometric mean be the correct way? I.e. 1.10 to the power of 0.25. That would yield 2.41% instead of 2.5%. Thank you.
Great video - Thank you. However, both the "Equal CF - Annuity due" and the "Perpetuity"seem not have been covered in the video despite being outlined in the "4. The Future Value of a Series of CFs" introducing slide. Could you please advise if these two topic areas were described in more detail along with the example calculations plus formulas in any other video elsewhere?
Hi, thank you for the lecture sir. I’m not able to get 17156 as an answer in the last example. My entries on calc are: cf0=0, cf1=1000, cf2=2000, cf3=3000, cf4=4000, cf5=5000 and all frequencies are 1. Then npv, I=10%, down arrow, CPT. Can you please help? Thank you.
formula goes, PV*(1+r)n 1000*(1+10%)4 1000*(1+0.1)4 {1.1 came by converting the 10% into decimal (i.e =0.1) + 1 = 1.1} 1000*(1.1)4 1464.1 for cash flow 1
I don't understand the brute force of unequal $ flows on the calculator. I put the cash flows in, c01 = 1,000, f01 = 4, and so on. Do I even insert the 5,000 as a cash flow? because there are no # of periods associated with the number so discount rate shouldn't effect. Haven't been able to get the $17,156,1 answer. Please help in how to insert the cash flows on the calculator to get NPV and then to get the FV. I get around 17,362, and thats without including 5,000 as a cash flow. Just trying to understand how to insert it. Thank you for all of your help.
Insert CF0=0/ C01= 100/ C02=2000/ C03=3000/ C04= 4000/ C05=5000 (keep the frequency as it is) then press on NPV and insert I=10% and compute the NPV, then use the answer as your PV to get the future value
Hi Sir please assist, On example of continuous compounding (3.2) the answer i get is 36,153.966... which is different from yours i.e 55,704 where do i go wrong? I am following your instruction but ended up with a different Ans
The 4% rate given in the question is an annual rate. Regardless of the frequency of compounding (quarterly, monthly, daily, continuously, etc.) the convention is for the rate to be stated in annual terms. That is why it must be adjusted by 365 days to calculate the daily rate. You will find this to be the case in the CFA Institute questions as well.
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IFT videos are the best. Guy is in a different league to kaplan
8:47. 4% compunded daily has been mentioned in question. But solution is as per compounded annually.
same doubt
It is assumed that 4% is annual return compounded daily@@adityabajaj6686
thank you so much for such a high level of simplication of concepts. It is all so complicated elsewhere in other materials. I wish I came across this channel earlier.
I bought kaplan course. This guy os teaching better than them. I cant believe i spent 2 thousand bucks. Omg. :/
Dear IFT fan & follower. Thank you for your kind words. We are really pleased that you are able to benefit from IFT UA-cam videos. Be sure to Like the videos; share IFT videos within your social media circles; Like the IFT FB page (facebook.com/CFA.Trainer). Please also join Analystforum.com where we will be most grateful if you can show your status as “Studying with IFT”. Thank you! - IFT Support Team
I swear amazing conceptual clarity.
@@AAASTHA does this channel's quant videos cover full level 1 CFA syllabus?
IFT videos/explanations are the best. I have tried most prep providers, but no one can beat IFT.
does this channel's quant videos cover full level 1 CFA syllabus?
hoping these lectures get me through this years CFA
does this channel's quant videos cover full level 1 CFA syllabus?
Instead of using brute force for the unequal cash flows calculations, what I find highly effective is inputing every single casflow to CF function and then computing NPV using relevant discount rate. The result is NPV at time 0, so all that has to be done is to compute FV based on that.
Yes, rightly said.
IFT Support Team
Ah, so you use soft force, not shock and awe brute force. how about "going nuclear"?
All has been okay up until this point - thank you kindly @IFT. However, I am a bit stuck on calculating FV for unequal CF. I believe the method mentioned by yourself, Barrtlomiej, is what I need to do. When I enter CFs, 10pc for i, and then compute for FV, I get 0.00... When I repeat the process and compute for NPV, I get 10,652.59....
I am using HP 12c. Perhaps you are using BAII but can you please explain Bartlomiej?
Brother can you explain me this how to do unequal CF calculation with your method?
Thanks again for a conceptual lecture !
Thanku, your videos are really helpful. And the way u explain is simply amazing. Thanku once again.
I have a quiry with regard to ordinary annuity
I thought the formula was A{(1+r)^-n }-1/r. Could u kindly clarify? I could be wrong. I am not sure why to the power of is not a minus. You are powering it with a positive? Kindly assist.
Sir, on 11.54 what do you enter into a TI calculator to work it out please?
Dear all, why don't we take geometric mean of 10% in order to get the period rate but rather divide by four? Wouldn't geometric mean be the correct way? I.e. 1.10 to the power of 0.25. That would yield 2.41% instead of 2.5%. Thank you.
Here 10% return is an annualized rate. To adjust it for quarterly compounding, you need to divide it by 4.
IFT Support Team
Great video - Thank you. However, both the "Equal CF - Annuity due" and the "Perpetuity"seem not have been covered in the video despite being outlined in the "4. The Future Value of a Series of CFs" introducing slide. Could you please advise if these two topic areas were described in more detail along with the example calculations plus formulas in any other video elsewhere?
All sections which are in CFAI curriculum are covered in the lecture.
IFT Support Team
9:45 The answer I'm getting on my calculator is FV = 3,001,200.239 what could be the problem please help!
Looks like A is the answer…
yours is correct this person divided the interest by 365 even when the rate is specified to be compounding daily
@@meetpremchandani3531 it should have been compounded annually.
The rate of interest is 4% per year compounded daily. So the person in the video did it correctly
Hi, thank you for the lecture sir. I’m not able to get 17156 as an answer in the last example. My entries on calc are: cf0=0, cf1=1000, cf2=2000, cf3=3000, cf4=4000, cf5=5000 and all frequencies are 1. Then npv, I=10%, down arrow, CPT. Can you please help? Thank you.
Is this version of the video applicable for feb2021 exam ?
yes
Yes. it is.
IFT Support Team
@@IFT-CFA Is this applicable for July 2021 exam?
does this channel's quant videos cover full level 1 CFA syllabus?
Great way of teaching
sir how to calculate future value of unequal cash flows on calculator
In 4.2 unequal cash flow
Why you multiply 1000×1.1 , 2000 × 1.1
What is 1.1? What is it value?
formula goes,
PV*(1+r)n
1000*(1+10%)4
1000*(1+0.1)4 {1.1 came by converting the 10% into decimal (i.e =0.1) + 1 = 1.1}
1000*(1.1)4
1464.1 for cash flow 1
Isn’t it getting compounded daily ..
Hi sir, the second example for continuous compounding is not very clear. Can you please explain ?? I am not able to get the exact same value as yours.
100*(e^.12) = 112.75
IFT Support Team
@@IFT-CFA on calcultor even am not getting
Its giving 212.026
@@kabirbansal2693 coz you're using ln instead of ex. 0.12 then Press 2nd button then ln button x 100. You'll get it.
I don't understand the brute force of unequal $ flows on the calculator. I put the cash flows in, c01 = 1,000, f01 = 4, and so on. Do I even insert the 5,000 as a cash flow? because there are no # of periods associated with the number so discount rate shouldn't effect. Haven't been able to get the $17,156,1 answer. Please help in how to insert the cash flows on the calculator to get NPV and then to get the FV. I get around 17,362, and thats without including 5,000 as a cash flow. Just trying to understand how to insert it. Thank you for all of your help.
Insert CF0=0/ C01= 100/ C02=2000/ C03=3000/ C04= 4000/ C05=5000 (keep the frequency as it is) then press on NPV and insert I=10% and compute the NPV, then use the answer as your PV to get the future value
I am not able to get the answer on the 11:53 on the video
2:52 Sir I didn't get it. My answer is 13. 125. How do you get 5.649?
14.10 : I am getting for monthly compounding 112.72 instead of 112.68 can someone please help? Thanks.
Watched!
If she deposits $24,000 at the end of the first year, how does she receive interest for that year and why do we have to compute that?
It is an ordinary annuity where payments occur at the end of the period.
IFT Support Team
@@IFT-CFA the answer i get on my calculator using the inputs is different when using the formula 23:30 and as is the case with previous questions
sir in daily compounding my ans is coming 111.57. please rectify my mistakes
Even I am getting the same answer, can you please correct the mistake we might be making,
thank you
Kindly share the steps you are using to calculate it so that we can check where are you making an error.
IFT Support Team
@@IFT-CFA same here i keep getting 111.57, is that the correct answer?
Sir these are the steps we used
N=365 ; r=12÷365 = 0.03; PV=100
Ans= FV = 111.57
where we wrong kindly explain
@@manishachoudhary5249 How do we get the right answer. Now are you aware?
Hi Sir please assist, On example of continuous compounding (3.2) the answer i get is 36,153.966... which is different from yours i.e 55,704 where do i go wrong? I am following your instruction but ended up with a different Ans
#(3.2)
0.036×3= 0.108 then press (2nd) (e ^x)
You will get e ^rn = 1.11
FV= PV× e^rn
FV= 50,000 × 1.11= 55,702.39
@@manishachoudhary5249 👍
@@manishachoudhary5249 the answer is still incorrect
9.33 it is wrong buddy , you don't have to divide it by 365 as the rate is daily compounding
The 4% rate given in the question is an annual rate. Regardless of the frequency of compounding (quarterly, monthly, daily, continuously, etc.) the convention is for the rate to be stated in annual terms. That is why it must be adjusted by 365 days to calculate the daily rate. You will find this to be the case in the CFA Institute questions as well.
🙏🙏👍👍