Saturday, July 13, 2013

In Finance, always look forward

An interesting mindset of Finance is to always look forward - time travel if you have to.

A specific application is when calculating the amount owed at a point in time.
Instead of computing the entire loan amortization table to answer the question, it is easier to simply "time travel" to the point-in-time of interest and look forward to see how many payments are outstanding and do an PV calculation.

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