You might want to watch the videos on present value.

There's financing, there's installment plans.

Payment per period

Let's split the bill.

He payed in installments.

But we don't' think like this in Finland.

In this case, Bank A had some loans from

And then some of its payment is today.

Both elements in the parse tree that are involved in the transaction.

And that future date is at maturity.

I think most of us understand the general idea about life insurance

We give a 10 discount for cash.

Will you give any discount if I pay in cash?

I thought we had discussed a cash discount.

Because some of them have paid, and some of them are still paying.

Payment

Pay up

Can you say that?

But we want to split the pay that's due them, instead.

McMansion for me.

Processing Payment

Number of periods

And the payments?

I paid at the appropriate time.

Oftentimes you want to discount a payment two years out by a higher value than something that's only one year out.

He delayed payment on some pretext or other.

We'll turn right down here at the next block. Well, suppose we don't find him?

And you could guess what the next line is going to be, given that this says pre tax.

The nice mathematical thing about discount factor is it keeps this expectation bounded.

It easy to show that this expression over here will always be smaller or equal to 1 over 1 minus gamma times the absolute reward maximizing value and which in this case would be plus 100.

But the big learning from this is how dependent the present value of future payments are on your discount rate assumption.

Return rate the one that Soros was so worried about 97 percent.

We have Loan C.

That will now compound over the next month.

And then year 10, I pay the 100,000 plus I pay back the 1 million.

That is the surveillance system.

And so my TED wish is based on the common denominator of these experiences.

A 10 tax will be withheld from the payment to you.

So what they do is out of this 10 , they pay them some of the basis points.

So actually, let me do that.

Discount rate

Now what can we do ?

What's this, dear?

He pays good.

Does it have to be the full amount?