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Part IV: Building Financial Formulas > Building Investment Formulas

Chapter 18. Building Investment Formulas

IN THIS CHAPTER

Working with Interest Rates

Calculating the Future Value

Working Toward an Investment Goal

Case Study

The time value of money concepts introduced in Chapter 17, “Building Loan Formulas,” apply equally well to investments. The only difference is that you need to reverse the signs of the cash values. That's because loans generally involve receiving a principal amount (positive cash flow) and paying it back over time (negative cash flow). An investment, on the other hand, involves depositing money into the investment (negative cash flow) and then receiving interest payments (or whatever) in return (positive cash flow).


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