Time Value of Money – Six Functions of a Dollar
Appraisal Training: Self-Paced Online Learning Session
Welcome
Welcome to the State Board of Equalization's (BOE) self-paced online learning session on the Time Value of Money (commonly referred to as the six functions of a dollar).
The purpose of this learning session is to explain the compound interest functions presented in Assessors' Handbook Section 505, Capitalization Formulas and Tables, the key concepts of the time value of money, and its relationship to appraisal.
This learning session consists of 10 modules; each module provides discussion of the function or concept and shows practical examples of the calculation or method.
By the end of the session, you will understand:
- The function and derivation of each of the compound interest functions presented in Assessors' Handbook Section 505.
- The appraisal application of the compound interest functions.
There are six compound interest functions presented in Assessors' Handbook Section 505:
- Future Worth of $1
- Present Worth of $1
- Future Worth of $1 Per Period
- Sinking Fund Factor
- Present Worth of $1 Per Period
- Periodic Repayment
We hope that you find the information presented in this learning session beneficial. Links to the Assessors' Handbook Section 505 (AH 505), Capitalization Formulas and Tables are available throughout this presentation and will open in a separate tab to allow for easy reference.