Chapter 3: Interest and Equivalence
tl;dr money at different times should be valued at different ratios, based on interest rates that compound
↑ F=172,220
1965 
 2013

↓ P=18
F = P(FP,i,N), FP mean F given P
F = 18(1+i)^48
solving for i, we get 21% annual ROR over 50 years, or Return on Revenue
Nominal is the stated interest rate, agnostic of compounding period (sometimes called APR)
 12% compounded monthly refers to the nominal rate, but is actually Effectively 12.68%
Annuity starts not at payment period 0 but at 1.
 P_{1} = A(P given A, i, N)
 multiplying (1+i)^{n} is (F/P,i,N)
 multiply by 1/(1+i)^n is (P/F,i,N)
Chapter 4: Equivalence of Repeated Cash Flows
For uniform series over time, to calculate future amount:
For uniform series calculating its present value (considering compounding interest):
Chapter 5: Present Worth Analysis
One way of comparing things is with present worth analysis

independent alternatives are the cash flows of each alternative not relating

mutually exclusive alternatives choose only one out of many

present worth analysis is evaluating mutually exlcusive alternatives at the present time
 net present worth = PW(benefit)  PW(cost)
Chapter 8: Risk
Average, Sqr, Varp, Stdevp, Frequency, Count, Ln
Three risk characteristics of financial assets

Horizon, how long it takes to get money

Safety is there guarantee?

Liquidity how easy it is to sell the asset
Exante is the expected return of an investment
 on a bond, we already know what to expect, so you can simply calculate exante
Expost is a measure of past performance
 actual return realized upon sale of the asset
 will be the same as exante if you sell at bond maturity date
Chapter 6: Choosing a discount rate
We used net present value and internal rate of return
 for discounting,
 Weighted average cost of capital (WACC) is the funding cost for many corporate projects
Chapter 15: Minimum Attractive Rate of Return (MARR)
Assumed interested rate was given so far, but in practice we compute different rates or MARR

closed end mutual funds IPO on stock market and there's a fixed number

open end mutual funds have an unlimited number of units, but must have a reserve for "redemption"