Introduction to Present Value

[TheErpuzzetta]

lets assume i have a risk free wank

[TheStfu1000]

but if you decided to take 90$ and times it by 1.05% and then you divided 110$ by 1.05. then the present value of 110$ wouldn't be greater than the the number you get from 90*1.05. so how do you come up with the initial numbers? i knew finance would be hard can someone help.

[submissivegirl12]

oh wow

[F5Julianne892]

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[gxMolly797]

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[jtle2003]

Thank you very much! I understand what PV is now! I am subscribing to your videos.

[jadedconformist]

Perhaps I missed something that I hope someone can explain. You suggested that we choose the $105 now over the $110 later because after we discount it, we are essentially getting 104.76 in pv dollars. Yet you compared that amount to $105 when you should have compared it to $100, correct? Why didn't you compare the 104.76 to the $100 instead of the $105 since the 105 amount was extrapolated to be the amount received not right away, but after a year?

Please clarify. Im sure I missed something. ;)

[HaHaStuPadasso]

@jadedconformist He did compare the 104.76 to the $100 in the very first example. 100 is the PV of 105. 104.76 is the PV of 110. 104.76 > 100 so you would take the $110 a year from now. Got it?

[celestin50]

those videos are not helpful because you are not using formula to explain. i think it is very easy&important for some people to understand it. thank you

[sleepyhappiness]

@celestin50 formula isn't always the easiest or best way to learn. I prefer this teaching method, I can always go back and find formulas later after I understand what I'm actually doing.

[xixad]

thank you!

[RunLiberty]

Ron Paul 2012 Debate Day Money Bomb Today!

[haseebahmed07518]

i dont know what year you will be watching this video in... haha well said! its 2011 haha

[mimi1234384]

very good!! thank u!!

[imreallyjin]

learning more from 4 minutes of this video than studying on my own for final in 2 hours. Thanks Khan!

hahahahaha

[nickohanlon]

thumbs up if this is your studing for a cal test!!

[Chiszle]

I've watched about 8 videos on this topic, this was the only one that was clear to me. And I was gaming while doing so.

[MixesAndStuff]

That is a cool on-screen calculator.

[krizutch]

Cool video but the number of times you keep clarifying that things will get more complicated when you add risk and start going off on tangents then say "we will get to it later" gets annoying.

Just say it once in the beginning... we all understand this is basic.

[thegoonist]

what about inflation?

[tanyamuriyan]

Try Asian women # lushfmlk.info #

[heart258]

I've been studying applied finance in uni. for 3 years....and I can still get confused with the various definitions of PV in the different textbooks. Thanks you so much for this video!!!

[LowWaterMark]

Please do (and title) a seminar on "Cash Flow".

You have "Income Sheet" and "Balance Sheet" which are great. "Cash Flow" would balance it out.

[ZehHand]

Nice job, Sal!

[serby21]

You could have easily did this and charged for it. Khan, you are a modern day Gandhi, and we thank you for it :)

[Khaksufee]

Awesome, you are so good

[and086]

Thank you! :)

[tejaswini1403]

thanks..its easy understaing PV after watching this..

[rax7]

"Hopefully people will watch this video in the next millennium. "

HAHA..... if youtube would still exist in the year of 3000.

[theporksicle]

Maybe I'm overthinking this but I would take the $100 today and convert it into a different currency (don't know which one atm) in case the dollar falls. Or maybe into gold or buy a forward on a barrel of oil.

I guess if we were talking arbitrary 'units of currency' (i.e. in a world where there was only one currency) then I'd take the $110 in a year.

[kingtree196x]

Did I miss something? Did you say initally you would give me $100 today and toward the end of your talk, you said you would give me today $105 and I could invest it at 5% rate and earn $110.25. How did you go from giving me $100 toay to giving me $105 today?

[arndawgmp]

it was to make the 110 a year from now the lesser of the two deals.. dont be waiting for a check...

[holisterchik432]

This is so informative!! Please post more. I love it!

[vilpraia]

Mate these videos are so much helpfull and very clear to understand, you have a great approach of teaching, well done!!

[ennmtl]

@vilpraia Watch the video again dude! It is clearly explained. He is just comparing 2 PVs.

[svijaikumar]

Really helpful in understanding some of the complex and simple financial terms..

[Ruks8]

man thats clear as crystal, now i understand present and discount value

[labelskate102]

I'm in finance 300 right now. thank you!

[blingping117]

I'm thinking of majoring in finance. The first thing I dedicated myself to do is look through this entire playlist. I just want to thank you for giving me and everyone else such an opportunity.

[zoomerbemen]

awesome :)

[Allmyinfoisunreal]

Hey, this is so cool. Continue making these great videos. I do not know why they are not as popular as all the other less interesting vids on youtube, I mean this often makes me want to say "But this is so simple!"

[latinsdoitbetter]

that's amasing! thank you very much from argentina and france!

[technite07]

Really great explanation. Thank You!

[simplica1]

Really great explanation! Can you also explain about IRRs ?

[rjjrdq]

Clear as a bell. Great video.

[sghetti]

I understand that if you compare the difference of $4.76, the second option is the better choice. However, what does this difference MEAN? Is this a physical property or just a scalar in space from which we compare the original quantity with?

[ananihdv]

the difference is $ cash!

[vitaminenoi]

I just came across you videos ,and let me tell you that whatever you did , you did not due for nothing you are helping people to understand what they did not in class

English is the 5 language to me and from reading the book they give me i couldn't understand a darn thing ,honestly i spent 1 whole day on translating in different languages to have a clearer view , but You, you did a miracle A deeply Thank you, keep up the good work and enlighten us who are walking in the dark corridor of Finance

[mystryunfold]

thats where the fundamentals i think has gone into wrong direction i.e. we started to value currency instead of real wealth(e.g. gold) & that in our greed we simply put the money in and take interest. We need to have interest free i.e. trade based economy where profit/loss i.e. risks are shared. you ask the banker that why does value of money decrease & whats its based on.they wont give u satisfactory answere.

[smedheat]

dude, thanx

[LostinArnhem]

Thanks for taking time to make this video. Very helpful! It builds on and reviews what we are learning in the Corporate Finance Class.

I'm very grateful that you go through it step by step. In the class the Prof. flies through concepts.

Your easy to follow, so its very rewarding.

Dank u!

[sagevadi]

Awesome! I'm doing my MBA and learning about NPV/PV/FPV right now and have found your videos extremely useful!!!

[Huetnak]

where did you get that calculator?!?!?! ^^

[Kerpal2253]

Search virtual-ti.zip, although I think you'll end up with a ti-83, you can get the rom for ti-85 and upgrade. Read up on it, and you'll see the issues involved.

[Waranle]

Thank you alot Sal, everytime i open one of your videos i learn something new!

[vickiormindyb]

If the U.S. Government is risk-free, why is our government in a current financial fiasco?

I'm not trying to be sarcastic, I'm truly baffled about why our government has such a gigantic National debt.

[Shadyhunter04]

Overspending, social security, and expansion of medicare. The only reason it's "risk free," is because the government can always borrow or print the money if it gets really bad. Taxes are unpopular, but no congress or executive has ever really ever cut spending, so they go the alternate route of deficit spending.