CHAPTER 6 Time Value of Money Future value Present value Annuities Rates of return Amortization 6-1 Time lines Show the timing of cash flows. Tick marks occur at the end of periods, so Time 0 is today; Time 1 is the end of the first period (year, month, etc.) or the beginning of the second period. | CHAPTER 6 Time Value of Money Future value Present value Annuities Rates of return Amortization 6-1 Time lines 0 12 3 i CF0 CF1 CF2 CF3 Show the timing of cash flows. Tick marks occur at the end of periods so Time 0 is today Time 1 is the end of the first period year month etc. or the beginning of the second period. 6-2 Drawing time lines 100 lump sum due in 2 years 3-year 100 ordinary annuity 100 lump sum due in 2 years 0 1 2 i 3 100 3 year 100 ordinary annuity 0 1 2 i 100 100 100 .
