Present value

Present values

Our price is considerably higher than the current market price.

And if you were to discount this back.

But the present value, what does that mean?

Obviously a 6 Price to Earnings of 20 times 2013 earnings isn't as good as a 6 Price to Earnings of 2010, because earnings in the future aren't worth as much as earnings today.

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Or, God forbid, if housing prices actually go down.

Hopefully people will be watching this in the next millenia.

Let me draw the stock of IBM, it could look something like that's my y axis.

I'm really going forward.

That is 100.

What's the present value of 50 in 1 year?

Then auctions like eBay are another example of dynamic pricing.

In a present period, you are willing to pay a higher Price to Earnings ratio if the company is growing.

Well, we said let me do that in a different color.

Present value of 100 today is 100.

But that's just 1.02 divided by 1, which is just 100. 100 today.

And so the first of these that I will focus on the first is the price of competing products.

For any given price, it's going to lower the quantity demanded.

One dollar is equivalent to 110 yen.

And you immediately sells that stock that you don't even know, you sell the stock borrow from someone else.

Price

42 million in adjusted dollars. That's minus payload, of course.

let me just scroll down so let's say that one year so today, one year so we figured out that 110 a year from now, its present value is equal to so the present value of 110 is equal to 104,76.

It's not about low cost.

We'll now learn about what is arguably the most useful concept in finance and that is called the present value.

So that's where it comes from.

It's the best price that someone's willing to give you for something.

So this is a completely comparable value to this 26,000.

And I think that that's some kind of fire sale price, quote unquote.

They want to encourage high volume purchases, and so they have stepped pricing that is oriented to create volume.

'I make you a present of everything I've said as yet.'

So it equals 104,76.

And the notation is PV

It has been made possible, by the way, for certain other different reasons.

And finally, American families also pay a price for oil.

So the present value of 20 today, well that's just 20.

Let's say a guy invents a better light bulb.

The price of admission.

Par value