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11.2 Useful Investment Formulae
Authors: H H LevackPublication: NZIF Forestry Handbook, Volume Section 11 – Forestry business and investment, pp 2, Dec 2023
Publisher: New Zealand Institute of Forestry
Abstract: Compound single payment Finds the future value (Vn) in n years of a present payment or value (Vo) which may be a cost or income, compounded annually for n years at the interest rate i. Discount single payment. Finds the present value now (Vo) of a future payment or value in n years (Vn), which may be a cost or income, discounted annually for n years at the interest rate i. Compounded periodic payment (or land expectation value). Finds the value now (Vo) of a periodic payment of value (V), either a cost or an income, made now, n years from now, and every n years thereafter. Commonly used to determine the value of an unending series of rotations (the land expectation value Vo) when the present net value for one rotation (V) is known. Discounted periodic payment. Finds the value now (Vo) of a periodic payment or value (Vn) n years from now and every years thereafter. UPDATE WARNING: Significant parts of the Forestry Handbook were produced in 2005. The NZ Institute of Forestry is currently reviewing the future strategy and role for the handbook. In the meantime, some subject areas have been removed as they no longer provide accurate information. Remaining subject areas provide some relevance and/or guidance but users must take cognisance of the fact that information is now dated and in many places does not now reflect the entirety of modern knowledge and technology being applied to the management of New Zealand’s forests.