Cash Flow Diagrams
Calculate the future value of money using cash flow diagrams for loan and investment transactions with discount rates and present value analysis.
Cash Flow Diagrams
The future value of money.
Cash Flow Diagram - Loan Transaction
A loan transaction starts with a positive cash flow when the loan is received - and continuous with negative cash flows for the pay offs.
- Upward arrows - positive cash flow (receiving the loan)
- Downward arrows - negative cash flow (pay off)
The Present Value of the cash flows can be calculated by multiplying each cash flow with a Discount Rate.
Cash Flow Diagram - Investment Transaction
An investment transaction starts with a negative cash flow when the investment is done - and continuous with positive cash flows when receiving the pay backs.
- Upward arrows - positive cash flows (pay back)
- Downward arrows - negative cash flow (investing)