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Alan Cring Productions in association with the Emergent Light Studio presents

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the Illinois State Collegiate Compendium, Academic Lectures in Business and Economics.

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This is Business Finance, FIL 240 for spring semester 2024.

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Today, present value and future value.

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And then after 20 minutes before the end of class, you have a quiz to take.

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So we will begin without further ado.

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First a quick look at the numbers, just have a look to see what's going on out there in the market today.

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And as you can see, this is a bull day, but it's not a spectacular bull day.

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It's just kind of trying to decide if it wants to be happy.

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And as you can see, the Dow is barely up. It's just kind of wobbling around, break the water level.

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Oh no, you don't get to see it.

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Thank you.

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How long did I do this?

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Okay, as you can see, the Dow is just kind of wobbling around surface level.

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But the S&P, the Dow is up 0.15%.

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The S&P is up more, as one would probably expect, given that it's a riskier portfolio.

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It's up 0.59%, and then the NASDAQ is up a decent amount, 0.86 so far today.

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So we've got some momentum up. It's just not a roaring up kind of day.

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If you come over here and you check over to see what the bonds are doing, the bonds are actually,

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yields are down, which means prices are up, which means investors are buying bonds.

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And they're also buying stocks, which means that there is a general level of confidence

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in investing in any kind of security right now.

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Confirming that more, as you can see, gold is down.

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It's about to make it back below that break line at $2,000 an ounce.

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That's more good news. Gold is bought, and price goes up, when investors are very, very concerned.

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And right now we see that they are not concerned.

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They're using their money and capital to buy stocks and to buy bonds.

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So those are both good news. Even better good news is that crude oil,

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it was, the trading range it's been favoring for a couple of years now has been 72 to 79.

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And it was up there kind of close to 79.

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Matter of fact, I think it punched through for a little while, last week was it,

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but it's well down back towards the center of that trading range now.

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It's 76.54. So we got to, there's not anything to worry about,

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about gas prices going through the roof.

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All of those are indicators of a good economy, and we should hope that it will stay that way.

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On the other side of the world, however, the Nikkei, right at the bell last night,

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which was their morning, it was down.

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And then it just sort of piddled around, and there was a bull rally there towards the early afternoon,

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but by the end there was a surge of bears one more time, one last time, so, alright, there you go.

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But London, it had a good surge through the morning, mid-morning, and then it just sort of topped out,

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there was a little sell-off, and then it just bobbled around.

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So that was not the case when the sun rose, set over there, and it rose over here.

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We were in a pretty decent mood.

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We had a bull upswing at the beginning, but then the bears took over, but they couldn't quite kill it.

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So after that bear run in the earlier morning, it began to come back up, but it was, like I said,

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it's not a spectacular bull day, but we'll take our bull days wherever we can find them.

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And that's the way it is.

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Now, let me come over here, just a quick little lesson in investing.

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I'm going to look at a stock called Nvidia.

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You may recognize that I've shown it before.

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It's a very risky stock.

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Now, Nvidia, in a week, is going to report its last quarter of 2023 earnings.

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Every company gives an estimate of what it thinks those earnings are going to be when it reports,

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but then the markets have to assess, well, are they going to be, are they right,

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or are they too optimistic, or are they pessimistic?

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So in the days before the earnings are released, which will be on the 21st of February,

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we should see maybe some kind of activity.

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And if we look here, we see that Nvidia actually is up.

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So there is an expectation.

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Let me take you down here to show you the earnings.

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As you can see, Nvidia has beaten its earnings.

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The past four quarters, in the last two quarters, it estimated,

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and it came in well above the estimate.

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So the expectation is that they will come in above their estimate again this time.

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What actually happens when they say, our earnings, they're saying they're projecting $4.50 a share.

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Investors are kind of thinking that it might be more like $4.75 a share.

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There's an old rule, and I think I've mentioned this before, but maybe I haven't,

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buy on the rumor, sell on the news.

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In other words, in the run-up to that earnings date, the earnings call,

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then we should see optimism, they're going to be above, or pessimism, they're going to be below.

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As you can see here, there's optimism.

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Generally speaking, there's optimism.

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They're going to have a good earnings report, probably maybe better than what they said that they earned.

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Now, this is two-part, buy on the rumor.

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In other words, the rumor is going to be that they're doing good.

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They're going to report very good.

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However, the other part of it is, you sell on the news.

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Why would you do that?

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Because the rumors, okay, let's say that the rumors were right,

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and Nvidia is going to report earnings that are above $4.50.

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Well, that has already been impounded in the price.

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That's what the run-up has been all about.

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You're not going to get any more out of it by holding it any longer.

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Now, if they come in and they say, well, our earnings sucked, we didn't know it, but they sucked,

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well, all that run-up is going to just evaporate, and the stock is going to drop.

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So in any case, the rumor, and if they come in right on the earnings, well, that's already in the price.

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Matter of fact, it'll probably drop a little bit if they thought it was going to be better than that.

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So there's no reason, no game to hold on through the earnings call.

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You buy on the rumors either way or sell if you think they're going to go down.

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But when the news comes out, you should be out of the stock by then.

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That way, because you're not going to get anything out of it,

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and it could be that you're going to get your ass kicked because the rumors were wrong.

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So get out, so buy on the rumors, sell on the news.

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It's not just a folk saying.

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It actually has a logic behind it.

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Just thought I'd share that with you, and if you notice here, NVIDIA is a risky stock.

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It is at 1.68 on the beta.

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It is also substantially overvalued at 96.39 on the PE ratio.

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So even though good news may be in the offing for this earnings report,

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I mean, inevitably it's going to go down somewhere along the line.

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It's going to drop away.

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So that's where that all hangs.

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Now I'm going to do something here.

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We're going to move on to the fun part of the day.

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And I'm going to do a couple of things here.

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First things first, if you'll bear with me,

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I'm going to show you some stuff in Canvas for your benefit.

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Go into the student view here.

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Student view.

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Yeah, there we go.

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So you'll see up here what you see.

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A couple of things here.

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First thing to show you, and I've mentioned this before, but I want to emphasize it now,

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go to your files.

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Now in files, drop it down, spreadsheets.

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Now in these spreadsheets, and I'll tell you which ones are specific.

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The names are pretty indicative.

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But these spreadsheets are for the purpose of providing you templates to do problems,

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almost any of the problems that you would encounter in this part of the course and on,

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where we get more mathematical.

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And I've gone through this little history before, and I just want to emphasize this again.

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For ages, the way you did finance problems was with paper and pencil,

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and maybe you had those ginormous tables that you were using in your accounting classes.

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For over a century, that's how we did it.

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And then in 1975, there was, well, okay, calculators started getting more common in the early 1970s,

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and there was a big brouhaha in academia.

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Well, we shouldn't let them use calculators.

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They should use paper and pencil and times and divide,

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and maybe they can use a slide rule, which was a mechanical device for doing multiplications and divisions.

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But the first scientific calculators that were available to the common people

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were brought online by Texas Instruments.

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CASIO was in there too.

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The Texas Instruments SR-70 and SR-71.

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Well, God forbid we should allow students to use calculators in a classroom.

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That's just an abomination. Never.

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So being the kind of asshole I am, I started having students use calculators,

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but I didn't do it right away because not every student could afford a calculator.

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Once I knew that calculators were cheap enough so that anyone could get a decent one, we went to calculators.

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Well, that still left those tables in place.

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But then in the early 80s, two things started to come about.

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One was that financial calculators started showing up.

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The Triumph was in the early 80s, which is still sold to this day.

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I still have one of them. It was an HP12C.

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It was unbelievable how much it could do with what I show you.

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There was one big problem with it. It didn't use algebraic notation.

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It used an alternative called reverse polish notation, RPN.

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So in other words, when you did calculations, you didn't say five times four equals.

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You did five enter four times.

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There was no equal sign on the calculator.

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Okay, well, Texas Instruments came along and changed all that with its TI-80 series.

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The 80, the 82, the 83, plus Silver Edition 84, and then a Monster 89.

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That was a game changer.

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However, another thing was starting to show up, too.

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Spreadsheets. The first one was called Supercalc.

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And then it along came a giant leap called Lotus 123.

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And it was a standard even into the 1990s.

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Another one that started to pick up speed was Quattro or Quattro Pro.

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But then Microsoft came along with all of its shenanigans and violating antitrust laws.

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And everyone turned to Microsoft, even though what it was doing was patently illegal

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in the way it forced the other creative software out of the market.

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One way or the other, Excel was the standard.

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God forbid we should allow financial calculators or spreadsheets.

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And that's as far as right now is concerned, most professors have a fit

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if they hear that I'm using financial calculators, and they just have a cow

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if they know that I tell you.

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If you don't understand how these spreadsheets work,

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you can get about any quantitative problem done that way.

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Yeah, it's weakening one's skill, how to look up in a table,

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but then again it's strengthening your ability to function in the workplace in the 21st century.

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So that's where we are now with these spreadsheets.

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And I'll be bringing them up, we'll build them again from scratch

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so that you understand how things work.

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Let me pull one up right now real quick, and you don't have to know this,

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but I do want to point out how these little animals work.

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Oh, and there I did it again.

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Okay, you download over here on the three vertical dots, download.

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And now let me pull it up.

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Now all I'm doing this for is so that you can see how I construct these.

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These are internal rates of return, profitability index, net present values, and all that.

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And in some of them I've even put a graph in there that will help you along.

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But let me pull up another one here, NPV and IRR.

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This is a good one.

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Let me pull this one up.

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This gives you the feel of how I set these up.

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And this is also giving you a way to think about how you want to do modeling.

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What happened there?

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That's not what I wanted.

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Let's try this again.

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Did I download it and then miss it?

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Downloads, NPV, IRR, present value.

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There we go.

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This is a good example.

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Now the way I construct them is that you have a color key.

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Do not put anything in the orange box or the slight peach box.

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What comes out, what's calculated by the spreadsheet, is in the pale blue box.

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Everything else is what you would put in.

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You just take the word problem, pull the numbers out, and punch them in there.

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I've been teaching math this way since the early 1980s at Ohio State when I taught math.

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Get the numbers out of the word problem and then throw away the words and then just get the problem done.

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That's what you're doing here in Excel.

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This is one of the templates that you'll be able to answer questions that will make you look like a hero of finance.

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We do it with Excel now.

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That's just how it's going to be in this class.

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There's no tables and all that kind of stuff.

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There's where that stands for it.

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Let me take here.

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In these spreadsheets, there's one for every class, every different type of quantitative problem that you could encounter.

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Now, there's some tails and odds and ends.

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You'll see that it's probably smarter, better, for you to just use a calculator instead of Excel.

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In some of these problems, it's sort of like taking arithmetic and applying a quantum computer to it,

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especially these first couple of problems I'll show you today.

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Just use a calculator for those.

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Now, as far as calculators go, I'm going to show you something else here.

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A little bit of history again to bore you.

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Where is files?

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Okay, I don't want to go back up to files.

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Now, I told you about financial calculators and scientific calculators coming out.

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Back a long time ago in the 1980s, Texas Instruments provided a limited number of virtual versions of their calculators

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to professors and geeks so that they could see if these actually were good and they'd like to use them.

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Well, Texas Instruments provided, I got one of these.

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It was a zip file and you open it up.

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Then that was around for about 10 years.

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I would say, if you're a student and you don't want to buy a calculator, here's the virtual version of it.

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Then it disappeared from TI's website.

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They kind of hidden it so normal people couldn't find it.

226
00:18:45,000 --> 00:18:51,000
Somehow it popped up a few years later in Google's websites.

227
00:18:51,000 --> 00:18:53,000
Google had taken over.

228
00:18:53,000 --> 00:19:00,000
Then very quickly they locked it down so no one could get it and no one has seen it since.

229
00:19:00,000 --> 00:19:06,000
Except that I had all my old floppy disks and I had it.

230
00:19:06,000 --> 00:19:08,000
You can too.

231
00:19:08,000 --> 00:19:13,000
Now, if you download this and then you share this with every ho handle on social media,

232
00:19:13,000 --> 00:19:21,000
I will find you and I will tell the world that you hate Taylor Swift.

233
00:19:21,000 --> 00:19:25,000
God help you after that.

234
00:19:25,000 --> 00:19:27,000
Let me show you how you do it.

235
00:19:27,000 --> 00:19:30,000
Now, this works only for a PC.

236
00:19:30,000 --> 00:19:35,000
The heavy duty math, anything math, is not going to be on a Mac.

237
00:19:35,000 --> 00:19:41,000
That's why we recommend when you come to a college like this is you get a PC instead of a Mac.

238
00:19:41,000 --> 00:19:43,000
You're on your own if you've got a Mac.

239
00:19:43,000 --> 00:19:51,000
But if you've got a PC, a laptop, desktop, down here at the bottom, see virtual TI-83 calculator.

240
00:19:51,000 --> 00:19:57,000
Well, let's download that.

241
00:19:57,000 --> 00:20:02,000
Okay, so now I'm going to go over here to downloads.

242
00:20:02,000 --> 00:20:04,000
Now follow with me.

243
00:20:04,000 --> 00:20:06,000
When I show you how to do this, follow with me.

244
00:20:06,000 --> 00:20:10,000
It's a few steps to extract it and get it where you want it.

245
00:20:10,000 --> 00:20:11,000
Downloads.

246
00:20:11,000 --> 00:20:13,000
Well, there it is right there.

247
00:20:13,000 --> 00:20:17,000
Now what you're going to do is you're going to right click on that.

248
00:20:17,000 --> 00:20:18,000
That's a zip file.

249
00:20:18,000 --> 00:20:25,000
You're going to right click on it and you're going to go down.

250
00:20:25,000 --> 00:20:40,000
Okay, seven zip and extract the files.

251
00:20:40,000 --> 00:20:44,000
And it'll say, okay, here's extracted.

252
00:20:44,000 --> 00:20:52,000
And when you extract it, what will happen is you'll get a folder.

253
00:20:52,000 --> 00:20:55,000
Now a folder, you have to go through a couple of layers.

254
00:20:55,000 --> 00:21:01,000
Now one thing that I recommend, don't leave that folder in downloads.

255
00:21:01,000 --> 00:21:06,000
If you're like me, every now and then you delete all those accumulation of downloads.

256
00:21:06,000 --> 00:21:08,000
You don't want to delete this.

257
00:21:08,000 --> 00:21:11,000
I usually just scoot it over here to my documents.

258
00:21:11,000 --> 00:21:13,000
Okay?

259
00:21:13,000 --> 00:21:15,000
Just somewhere where it will be safe.

260
00:21:15,000 --> 00:21:22,000
Now let's go in there and look in documents and we'll find that folder.

261
00:21:22,000 --> 00:21:25,000
I said we'll find that folder.

262
00:21:25,000 --> 00:21:27,000
Where did I put it?

263
00:21:27,000 --> 00:21:30,000
Son of a...

264
00:21:30,000 --> 00:21:32,000
There it is.

265
00:21:32,000 --> 00:21:34,000
Okay, there's the folder.

266
00:21:34,000 --> 00:21:37,000
I did it for the last class so you're seeing it twice here.

267
00:21:37,000 --> 00:21:40,000
Double click on it.

268
00:21:40,000 --> 00:21:47,000
Is there some reason this sucks?

269
00:21:47,000 --> 00:21:50,000
Oh, there.

270
00:21:50,000 --> 00:21:55,000
And we'll come to folder VTI 83.

271
00:21:55,000 --> 00:22:00,000
Double click on that one and you'll see a blue icon.

272
00:22:00,000 --> 00:22:02,000
That's an executable file.

273
00:22:02,000 --> 00:22:09,000
Now you can leave it there and every time you want the calculator you can go rummaging around to find this.

274
00:22:09,000 --> 00:22:19,000
I recommend that you right click and go down, show more options, and you send it to the desktop.

275
00:22:19,000 --> 00:22:27,000
That way when you want the calculator you can just click on the icon on your desktop.

276
00:22:27,000 --> 00:22:33,000
Let me show you.

277
00:22:33,000 --> 00:22:38,000
There it is.

278
00:22:38,000 --> 00:22:41,000
And whenever you want the calculator it will be on your desktop.

279
00:22:41,000 --> 00:22:47,000
Now watch this.

280
00:22:47,000 --> 00:22:51,000
That's a real TI, except it's not real.

281
00:22:51,000 --> 00:22:56,000
It does everything that the actual TI calculator does.

282
00:22:56,000 --> 00:22:59,000
Amazing stuff.

283
00:22:59,000 --> 00:23:03,000
It looks, it has all the functionality.

284
00:23:03,000 --> 00:23:08,000
In fact, the stupid thing even turns off after a minute to save battery,

285
00:23:08,000 --> 00:23:12,000
which just irritates me to know, Ed, that it does that.

286
00:23:12,000 --> 00:23:14,000
But look at this.

287
00:23:14,000 --> 00:23:18,000
In the TI 83 Plus, and this is very popular among finance people,

288
00:23:18,000 --> 00:23:24,000
it has a set of apps called the finance apps.

289
00:23:24,000 --> 00:23:27,000
Apps, finance.

290
00:23:27,000 --> 00:23:37,000
And almost anything that I would have you do in this class is here in these apps.

291
00:23:37,000 --> 00:23:38,000
It's just amazing.

292
00:23:38,000 --> 00:23:41,000
It can do anything you want.

293
00:23:41,000 --> 00:23:42,000
And you'll see me.

294
00:23:42,000 --> 00:23:50,000
Sometimes quite, just realistically, it's faster to do it on this calculator than it is in Excel.

295
00:23:50,000 --> 00:23:57,000
The problem with doing it on a calculator and instead of Excel is that you don't have a document.

296
00:23:57,000 --> 00:23:59,000
You don't have a record.

297
00:23:59,000 --> 00:24:05,000
You don't have a printable sheet or a file that you can send to email to someone else.

298
00:24:05,000 --> 00:24:07,000
It's all there personally for you.

299
00:24:07,000 --> 00:24:11,000
So that's the downside of using the calculator.

300
00:24:11,000 --> 00:24:16,000
But, like for example, enter.

301
00:24:16,000 --> 00:24:26,000
Suppose that I wanted to get a loan for five years, and I'm sneaking in some things here.

302
00:24:26,000 --> 00:24:34,000
Five years and 12 payments a year, so that'd be a total of 60 payments.

303
00:24:34,000 --> 00:24:41,000
Let's say the APR on the loan was 7.99%.

304
00:24:41,000 --> 00:24:42,000
Now this is weird.

305
00:24:42,000 --> 00:24:50,000
Financial calculators are the only place you do this, but you don't put the decimal in.

306
00:24:50,000 --> 00:24:53,000
You just put in the percent as a number.

307
00:24:53,000 --> 00:25:00,000
In Excel, in the outer part of this calculator, it would be.0799.

308
00:25:00,000 --> 00:25:09,000
But if you're using a financial app, a finance app, a BA2, a TI-83, anything like that,

309
00:25:09,000 --> 00:25:12,000
you will put in just the percent.

310
00:25:12,000 --> 00:25:13,000
Just remember that.

311
00:25:13,000 --> 00:25:19,000
And I have to divide that by 12 because it will recalculate every time you make a payment.

312
00:25:19,000 --> 00:25:22,000
Now, we're going to buy a car.

313
00:25:22,000 --> 00:25:23,000
It won't be a fancy car.

314
00:25:23,000 --> 00:25:24,000
Let's say you want a car.

315
00:25:24,000 --> 00:25:28,000
You want to borrow $25,000.

316
00:25:28,000 --> 00:25:37,000
One thing about calculators is that present values are always entered as a negative,

317
00:25:37,000 --> 00:25:41,000
and your answer always comes out as a negative.

318
00:25:41,000 --> 00:25:47,000
That is just something that's been there since the dawn of these financial calculators.

319
00:25:47,000 --> 00:25:50,000
Just don't forget that you put in a negative.

320
00:25:50,000 --> 00:25:54,000
So in this case, I'll put in negative and use the negative sign.

321
00:25:54,000 --> 00:25:55,000
Don't use the minus sign.

322
00:25:55,000 --> 00:25:57,000
Use the negative sign.

323
00:25:57,000 --> 00:26:01,000
$25,000.

324
00:26:01,000 --> 00:26:03,000
Now I go down.

325
00:26:03,000 --> 00:26:06,000
We're going to calculate the payment, so leave that alone.

326
00:26:06,000 --> 00:26:11,000
Future value would be if you made a kicker payment at the very end.

327
00:26:11,000 --> 00:26:15,000
Leases are like that where you pay an extra amount and you get the car.

328
00:26:15,000 --> 00:26:17,000
Leave the rest of those alone.

329
00:26:17,000 --> 00:26:21,000
Whatever you have been told in any other class, leave them alone.

330
00:26:21,000 --> 00:26:28,000
Now down here at the bottom, it's end because you'll pay your payments at the end of every cycle.

331
00:26:28,000 --> 00:26:32,000
So I'm going to take it back up here to PMT.

332
00:26:32,000 --> 00:26:36,000
Alpha, solve.

333
00:26:36,000 --> 00:26:41,000
There it is, $506.79 a month is what you'll pay.

334
00:26:41,000 --> 00:26:43,000
That fast.

335
00:26:43,000 --> 00:26:52,000
And actually, doing it on this calculator is kind of faster than it is in Excel.

336
00:26:52,000 --> 00:26:54,000
I mean, I can just go through and do what ifs.

337
00:26:54,000 --> 00:26:59,000
What if I decided that I wanted to do six years instead of five years?

338
00:26:59,000 --> 00:27:09,000
Six times 12, we'll go back down and just recalculate PMT, put it on the PMT, alpha, solve.

339
00:27:09,000 --> 00:27:13,000
Okay, $436 a month.

340
00:27:13,000 --> 00:27:20,000
So as you can see, these calculators have a lot to say for them.

341
00:27:20,000 --> 00:27:26,000
And you have one now for those times when the first formulas I give you,

342
00:27:26,000 --> 00:27:31,000
they are so simple that it would be kind of ridiculous to use Excel to do them.

343
00:27:31,000 --> 00:27:34,000
It's easier just to use the calculator.

344
00:27:34,000 --> 00:27:41,000
Now in order to get out of apps in this calculator, you say second, quit.

345
00:27:41,000 --> 00:27:48,000
You're back on the front screen.

346
00:27:48,000 --> 00:27:57,000
You are fully able to use calculators and Excel on quizzes and exams in my class.

347
00:27:57,000 --> 00:28:01,000
And that's because I'd like to have you ready.

348
00:28:01,000 --> 00:28:05,000
I don't want to get you ready for the great jobs of the 20th century.

349
00:28:05,000 --> 00:28:09,000
You've got to be ready for the great jobs of the 21st century.

350
00:28:09,000 --> 00:28:16,000
And this is moving in front of us at an incredible rate.

351
00:28:16,000 --> 00:28:23,000
Within a year, I probably have to teach you how to use chat GPTs to do these problems

352
00:28:23,000 --> 00:28:24,000
instead of calculators.

353
00:28:24,000 --> 00:28:30,000
As a matter of fact, my advanced finance class, I'm having them build chat GPTs right now

354
00:28:30,000 --> 00:28:34,000
so they can do the problems that I'm having you use Excel to do.

355
00:28:34,000 --> 00:28:41,000
It's that fast. It's happening.

356
00:28:41,000 --> 00:28:43,000
So there you are.

357
00:28:43,000 --> 00:28:49,000
That's where we are right now in the state of, and it's not just finance.

358
00:28:49,000 --> 00:28:51,000
This is everywhere in business.

359
00:28:51,000 --> 00:28:55,000
And businesses are, some of them are right on the curve.

360
00:28:55,000 --> 00:28:58,000
Some of them are behind the curve trying to catch up.

361
00:28:58,000 --> 00:29:02,000
Some of them think they know what they're doing and they don't know jack about what they're doing.

362
00:29:02,000 --> 00:29:05,000
It's ridiculous the mess that it is.

363
00:29:05,000 --> 00:29:13,000
Getting you guys in there with a clean set of skills, well, you'll be the heroes.

364
00:29:13,000 --> 00:29:17,000
You don't get overrun by the imbeciles.

365
00:29:17,000 --> 00:29:24,000
Okay.

366
00:29:24,000 --> 00:29:27,000
Let's see why I'm bothered.

367
00:29:27,000 --> 00:29:31,000
Oh well.

368
00:29:31,000 --> 00:29:38,000
Madam, you have come to me and asked me if I will lend you $20 for a year.

369
00:29:38,000 --> 00:29:41,000
Now I've calculated in my mind level, timing, and risk.

370
00:29:41,000 --> 00:29:43,000
Well, the level, I can handle 20.

371
00:29:43,000 --> 00:29:46,000
Timing, you know, I can hold off a year.

372
00:29:46,000 --> 00:29:50,000
And the risk, okay, we'll go with it.

373
00:29:50,000 --> 00:29:51,000
Okay?

374
00:29:51,000 --> 00:29:56,000
So I'm about to give you this $20 and you say, I'll give you back this 20 in a year.

375
00:29:56,000 --> 00:29:58,000
Catch you in a year, brah.

376
00:29:58,000 --> 00:30:04,000
Okay?

377
00:30:04,000 --> 00:30:08,000
This is a one.

378
00:30:08,000 --> 00:30:13,000
I tried that at the Walmart and the security came and beat the crap out of me.

379
00:30:13,000 --> 00:30:15,000
No.

380
00:30:15,000 --> 00:30:16,000
20.

381
00:30:16,000 --> 00:30:17,000
Okay.

382
00:30:17,000 --> 00:30:19,000
You're going to give me $20 back in a year.

383
00:30:19,000 --> 00:30:24,000
You said, I'll give you $20 back in a year and I say, you can kiss my old wrinkled ass.

384
00:30:24,000 --> 00:30:26,000
No.

385
00:30:26,000 --> 00:30:27,000
Why not?

386
00:30:27,000 --> 00:30:32,000
What happened to the deal?

387
00:30:32,000 --> 00:30:35,000
Anything?

388
00:30:35,000 --> 00:30:37,000
Well, of course you don't.

389
00:30:37,000 --> 00:30:41,000
But then I'm going to tell my cats to go and find you.

390
00:30:41,000 --> 00:30:43,000
And I will feed them for a day.

391
00:30:43,000 --> 00:30:46,000
It won't be pretty.

392
00:30:46,000 --> 00:30:47,000
This is a bigger problem.

393
00:30:47,000 --> 00:30:48,000
Okay.

394
00:30:48,000 --> 00:30:51,000
Sir, I lend you $20 for a year and you give me back $20.

395
00:30:51,000 --> 00:30:53,000
What's the problem with that?

396
00:30:53,000 --> 00:30:54,000
What's the problem?

397
00:30:54,000 --> 00:30:57,000
Well, yes it is.

398
00:30:57,000 --> 00:30:59,000
But there's a reason why it's less now.

399
00:30:59,000 --> 00:31:03,000
Now this doesn't have anything to do with inflation and all that kind of stuff.

400
00:31:03,000 --> 00:31:13,000
It has to do with a fundamental thing that is recognized fully and it drives a capitalist system.

401
00:31:13,000 --> 00:31:16,000
And it is this.

402
00:31:16,000 --> 00:31:30,000
See, if I give you that $20 and you give me the $20 back in a year, I gave up the use of the $20 for a year.

403
00:31:30,000 --> 00:31:42,000
Regardless of inflation or other factors that might impact the purchasing power, the very fact that I gave up $20 for a year.

404
00:31:42,000 --> 00:31:58,000
I could have used this to get a grand slam breakfast at Denny's with the Happy Meal Kicker of the toy and the apple pie and the big cup of black coffee that nearly made me vomit.

405
00:31:58,000 --> 00:32:01,000
I gave all that up for you.

406
00:32:01,000 --> 00:32:03,000
So I just...

407
00:32:03,000 --> 00:32:07,000
Okay, yes, we've gone through a lot together.

408
00:32:07,000 --> 00:32:11,000
There was Berlin, 1987.

409
00:32:11,000 --> 00:32:16,000
You saved me from those Sazi spies that had caught me off guard.

410
00:32:16,000 --> 00:32:17,000
It was an ugly situation.

411
00:32:17,000 --> 00:32:19,000
There was a gunfight, but I managed to get out of it.

412
00:32:19,000 --> 00:32:28,000
We got that defector across the border and he told the CIA about the things that the Russians had captured from that alien spaceship.

413
00:32:28,000 --> 00:32:30,000
That's gone now, man.

414
00:32:30,000 --> 00:32:34,000
We've got to work in the present.

415
00:32:34,000 --> 00:32:35,000
$20.

416
00:32:35,000 --> 00:32:41,000
You see, at the bottom line, that's what we call interest.

417
00:32:41,000 --> 00:32:43,000
The interest rate aside...

418
00:32:43,000 --> 00:32:48,000
And I'll show you, interest rates have a lot of things in them, different risk factors and all that.

419
00:32:48,000 --> 00:32:57,000
But at the very core, all interest rates carry an opportunity cost of foregone consumption.

420
00:32:57,000 --> 00:33:01,000
An opportunity cost of foregone consumption.

421
00:33:01,000 --> 00:33:05,000
That is at the core of every interest rate.

422
00:33:05,000 --> 00:33:12,000
I've given up something so I get a reward for giving up what I could have done.

423
00:33:12,000 --> 00:33:14,000
That Denny's breakfast.

424
00:33:14,000 --> 00:33:22,000
And there would have been enough left over for one of those 30 cases of White Castle cheeseburgers at White Castle in Joliet.

425
00:33:22,000 --> 00:33:24,000
You ever been there?

426
00:33:24,000 --> 00:33:26,000
I know the people working there.

427
00:33:26,000 --> 00:33:31,000
I went in one night and the big old woman said, what do you want?

428
00:33:31,000 --> 00:33:33,000
I said, what I want ain't on the menu.

429
00:33:33,000 --> 00:33:35,000
She said, shut up and give me your order.

430
00:33:35,000 --> 00:33:42,000
Yes, evil mistress.

431
00:33:42,000 --> 00:33:47,000
You know it's really hard to do comedy about present and future values, but I try.

432
00:33:47,000 --> 00:33:48,000
God knows.

433
00:33:48,000 --> 00:33:55,000
Look, the thing is that there's another part to this.

434
00:33:55,000 --> 00:34:08,000
You see, you sir, I hire you to work for me at $4 an hour.

435
00:34:08,000 --> 00:34:11,000
I'm not buying you.

436
00:34:11,000 --> 00:34:14,000
I'm renting you.

437
00:34:14,000 --> 00:34:16,000
Rent a guy.

438
00:34:16,000 --> 00:34:17,000
That's all it is.

439
00:34:17,000 --> 00:34:18,000
There is no purchase.

440
00:34:18,000 --> 00:34:20,000
And that's the same thing with money.

441
00:34:20,000 --> 00:34:23,000
You don't pay a price for money.

442
00:34:23,000 --> 00:34:25,000
An interest rate isn't a price.

443
00:34:25,000 --> 00:34:27,000
It's a rental rate.

444
00:34:27,000 --> 00:34:34,000
Just like that wage, I am renting you by the hour.

445
00:34:34,000 --> 00:34:40,000
And just like when you rent an apartment, you're not paying a price.

446
00:34:40,000 --> 00:34:42,000
You're paying a rental rate.

447
00:34:42,000 --> 00:34:48,000
So interest rates are not, sometimes you'll even hear me stumble and say, well interest is the price of money.

448
00:34:48,000 --> 00:34:49,000
No, it's not.

449
00:34:49,000 --> 00:34:53,000
Interest rates are the rental rate of money.

450
00:34:53,000 --> 00:34:56,000
There are different rental rates for different kinds of funds.

451
00:34:56,000 --> 00:34:58,000
There's a rental rate for short-term money.

452
00:34:58,000 --> 00:35:02,000
There's another rental rate for long-term capital.

453
00:35:02,000 --> 00:35:04,000
But they all are rent.

454
00:35:04,000 --> 00:35:12,000
You're renting some kind of money or capital for a certain period of time.

455
00:35:12,000 --> 00:35:18,000
When they lend you money at the bank or capital at the bank for a car or for a home,

456
00:35:18,000 --> 00:35:21,000
you are renting money from them.

457
00:35:21,000 --> 00:35:26,000
The rental rate is the APR, as they call it, the annual percentage rate.

458
00:35:26,000 --> 00:35:28,000
But it's just a rent.

459
00:35:28,000 --> 00:35:36,000
Okay, now, let's do a couple more.

460
00:35:36,000 --> 00:35:42,000
You, madam, came into a nice pile of $15,000.

461
00:35:42,000 --> 00:35:48,000
And at first you think Macy's is open online 24 hours a day.

462
00:35:48,000 --> 00:35:50,000
That's what I would do.

463
00:35:50,000 --> 00:35:54,000
Walmart, and I've told you, I'm a Walmart ho.

464
00:35:54,000 --> 00:36:00,000
I go there all the time.

465
00:36:00,000 --> 00:36:04,000
But you decide, okay, fine.

466
00:36:04,000 --> 00:36:08,000
I'm going to put that money away.

467
00:36:08,000 --> 00:36:12,000
So I'm going to start with this.

468
00:36:12,000 --> 00:36:41,000
You deposit $15,000 into an account that pays 5.75 percent

469
00:36:41,000 --> 00:36:55,000
compounded quarterly.

470
00:36:55,000 --> 00:37:14,000
What will you have after 15 years?

471
00:37:14,000 --> 00:37:20,000
In other words, I'm looking for a future value.

472
00:37:20,000 --> 00:37:27,000
Know the present value, $15,000, but I'm looking for a future value.

473
00:37:27,000 --> 00:37:32,000
Now, this is where we bring up the core formula.

474
00:37:32,000 --> 00:37:37,000
All of the more complex formulas that you'll see, the book insists on showing you,

475
00:37:37,000 --> 00:37:40,000
I'm not even going to beat them over the head too much.

476
00:37:40,000 --> 00:37:47,000
But the core formula that is the spawn of all the others is pretty simple.

477
00:37:47,000 --> 00:37:56,000
The future value, FV, is going to be the present value, PV, times one plus the

478
00:37:56,000 --> 00:38:00,000
interest rate to the T power.

479
00:38:00,000 --> 00:38:04,000
However, we have to stop here.

480
00:38:04,000 --> 00:38:11,000
The R and the T are a little bit more complex than what you might think.

481
00:38:11,000 --> 00:38:23,000
The R is the periodic interest rate.

482
00:38:23,000 --> 00:38:36,000
And the T is the number of periods.

483
00:38:36,000 --> 00:38:43,000
In other words, that APR that I gave you, 5.75 percent, that's not what R is.

484
00:38:43,000 --> 00:38:45,000
Watch.

485
00:38:45,000 --> 00:38:47,000
Okay.

486
00:38:47,000 --> 00:38:57,000
Let's say the APR is 8 percent.

487
00:38:57,000 --> 00:39:05,000
Number of compoundings per year.

488
00:39:05,000 --> 00:39:11,000
Then the periodic interest rate R in the next column.

489
00:39:11,000 --> 00:39:21,000
And then one column over the number of compoundings per year.

490
00:39:21,000 --> 00:39:28,000
Now, suppose that we say annual.

491
00:39:28,000 --> 00:39:35,000
That would mean one compounding every year.

492
00:39:35,000 --> 00:39:44,000
R would then be 8 percent divided by one, which is 8 percent.

493
00:39:44,000 --> 00:39:46,000
I can do basic arithmetic.

494
00:39:46,000 --> 00:39:49,000
It's just when you get a little bit more complicated, I start making mistakes.

495
00:39:49,000 --> 00:39:58,000
And T would be, in this case, let's say it's 15 years.

496
00:39:58,000 --> 00:40:02,000
T would be 15 times one.

497
00:40:02,000 --> 00:40:08,000
In other words, there would be 15 years, but there would also be 15 periods.

498
00:40:08,000 --> 00:40:13,000
Because there's only one period in each year.

499
00:40:13,000 --> 00:40:26,000
Suppose that we go to semi-annual.

500
00:40:26,000 --> 00:40:31,000
That would be two compoundings per year.

501
00:40:31,000 --> 00:40:42,000
So the R would be 8 percent, the APR, over two, which is 4 percent.

502
00:40:42,000 --> 00:40:47,000
And so the T would be 15 times two.

503
00:40:47,000 --> 00:40:59,000
In other words, there would be 30 compoundings in a year over the life of the instrument.

504
00:40:59,000 --> 00:41:08,000
The next popular one is four, quarterly.

505
00:41:08,000 --> 00:41:16,000
And in that case, the R would be 8 percent divided by four, which would be 2 percent.

506
00:41:16,000 --> 00:41:21,000
And T would be 15 years times four quarters.

507
00:41:21,000 --> 00:41:29,000
So in other words, there is a total of 60 quarters.

508
00:41:29,000 --> 00:41:37,000
The next one would be monthly, which would be 12.

509
00:41:37,000 --> 00:41:47,000
So this R would be 8 percent divided by 12, which would be 0.67 percent.

510
00:41:47,000 --> 00:42:05,000
And the number of compoundings would be 15, T equals 15 times 12, 160, I think.

511
00:42:05,000 --> 00:42:12,000
Now, the next one is weekly.

512
00:42:12,000 --> 00:42:19,000
Now I'm going to try this real quick. Madam, how many weeks are in a year?

513
00:42:19,000 --> 00:42:21,000
Thank you.

514
00:42:21,000 --> 00:42:24,000
Say that again with confidence.

515
00:42:24,000 --> 00:42:32,000
52? Yes, I mean you get all over the place. It kind of bothers me anymore that I get a lot of questions about how many weeks are in a year.

516
00:42:32,000 --> 00:42:35,000
It's 52, darn it.

517
00:42:35,000 --> 00:42:42,000
So in that one, you would have 52, and that would be 8 percent divided by 52.

518
00:42:42,000 --> 00:42:45,000
And if you think I'm going to try to do that in my head, you're wrong.

519
00:42:45,000 --> 00:42:54,000
And the number of compoundings would be 15 years times 52 weeks per year, and whatever that would be.

520
00:42:54,000 --> 00:42:58,000
That's how many weeks would be in 15 years.

521
00:42:58,000 --> 00:43:07,000
But then you have one last one that is of interest to us, daily.

522
00:43:07,000 --> 00:43:10,000
Okay, let's try this.

523
00:43:10,000 --> 00:43:13,000
There's two answers to that.

524
00:43:13,000 --> 00:43:18,000
365 or 360.

525
00:43:18,000 --> 00:43:22,000
Now technically you use both.

526
00:43:22,000 --> 00:43:38,000
You would use 365 for 8 percent divided by, but you would use 365 for 15 years times.

527
00:43:38,000 --> 00:43:43,000
I think the homework, they have you just do the 365 both.

528
00:43:43,000 --> 00:43:50,000
But in real calculations, you would do it with the 360 and the 365 together.

529
00:43:50,000 --> 00:43:53,000
Now where did that 360 come from?

530
00:43:53,000 --> 00:44:00,000
The official explanation is that there are 360 traditional bankers days in a year.

531
00:44:00,000 --> 00:44:05,000
There were five holidays for many, many decades.

532
00:44:05,000 --> 00:44:13,000
But the actual reason, and I could show you but I won't, back before calculators and all that,

533
00:44:13,000 --> 00:44:20,000
there was an arithmetic trick for dividing by 360.

534
00:44:20,000 --> 00:44:25,000
And I was taught, I don't even remember where I was taught, but it's weird and it works.

535
00:44:25,000 --> 00:44:29,000
But that was why they really used 360 as a divisor.

536
00:44:29,000 --> 00:44:35,000
It's because you could just do this little trick, move the numbers around a little bit and all that.

537
00:44:35,000 --> 00:44:37,000
But what were they are?

538
00:44:37,000 --> 00:44:42,000
Okay, now there's actually one even faster.

539
00:44:42,000 --> 00:44:45,000
There is instantaneous.

540
00:44:45,000 --> 00:44:47,000
And you'll never see it.

541
00:44:47,000 --> 00:44:54,000
It's provided for accounts only of the very wealthiest people in the world.

542
00:44:54,000 --> 00:45:00,000
But instantaneous compounding doesn't even use that normal formula right there.

543
00:45:00,000 --> 00:45:07,000
It uses the natural constant E to the power of the negative R or something like that.

544
00:45:07,000 --> 00:45:09,000
So don't worry about that one.

545
00:45:09,000 --> 00:45:10,000
Just ignore it.

546
00:45:10,000 --> 00:45:12,000
But those are the traditional ones.

547
00:45:12,000 --> 00:45:15,000
Now one quick side comment.

548
00:45:15,000 --> 00:45:23,000
There are two prefixes that are, just to keep them in your mind, I won't do them on a quiz or an exam,

549
00:45:23,000 --> 00:45:29,000
but the prefix by, B-I, that means every other.

550
00:45:29,000 --> 00:45:35,000
So if I said bi-weekly, that would be 26.

551
00:45:35,000 --> 00:45:39,000
Bi-monthly would be 6.

552
00:45:39,000 --> 00:45:41,000
Now the other one, semi.

553
00:45:41,000 --> 00:45:42,000
You see it right there.

554
00:45:42,000 --> 00:45:46,000
Semi means twice every.

555
00:45:46,000 --> 00:45:50,000
So semi-annual would be two times a year.

556
00:45:50,000 --> 00:45:54,000
Semi-weekly would be two times a week.

557
00:45:54,000 --> 00:45:56,000
Those two are out there.

558
00:45:56,000 --> 00:45:57,000
You might run into them.

559
00:45:57,000 --> 00:46:01,000
The one you do see is, rather commonly, is bi-weekly.

560
00:46:01,000 --> 00:46:06,000
Because a lot of companies, if you're a wage employee, they pay you bi-weekly.

561
00:46:06,000 --> 00:46:10,000
Or semi-monthly.

562
00:46:10,000 --> 00:46:18,000
As a matter of fact, if I understand it right, some of our salaried staff here is paid semi-monthly

563
00:46:18,000 --> 00:46:22,000
to get a check on the 15th and a check on the last day of the month.

564
00:46:22,000 --> 00:46:24,000
So they are out there.

565
00:46:24,000 --> 00:46:29,000
So just to keep it in your memory that those two show up.

566
00:46:29,000 --> 00:46:35,000
But I'll stick to these for anything that I would give you.

567
00:46:35,000 --> 00:46:38,000
But now we come to another side.

568
00:46:38,000 --> 00:46:48,000
Another problem.

569
00:46:48,000 --> 00:46:52,000
Madam, do you know that I am going to die someday?

570
00:46:52,000 --> 00:46:54,000
It won't be while this class is running.

571
00:46:54,000 --> 00:46:55,000
I guarantee you.

572
00:46:55,000 --> 00:46:58,000
I will come back from the grave to finish it.

573
00:46:58,000 --> 00:47:01,000
But it turns out that you're my daughter.

574
00:47:01,000 --> 00:47:08,000
And you just found out that I'm going to bequeath you $250,000.

575
00:47:08,000 --> 00:47:09,000
Yay!

576
00:47:09,000 --> 00:47:18,000
So now you're just checking the web to see if there are any places that charge a modest fee to off an old geezer.

577
00:47:18,000 --> 00:47:27,000
But as it turns out, actuarially speaking, you hear the life expectancy of a North American male is 77 years.

578
00:47:27,000 --> 00:47:30,000
Actually, that's not how you think about it.

579
00:47:30,000 --> 00:47:32,000
You use conditional probabilities.

580
00:47:32,000 --> 00:47:38,000
For example, if you reach 65, then the high probability that you'll live to 83.

581
00:47:38,000 --> 00:47:41,000
That's the life expectancy if you have made it so far.

582
00:47:41,000 --> 00:47:43,000
In other words, conditional probabilities.

583
00:47:43,000 --> 00:47:52,000
So you're going to figure out, okay, that old geezer, he's probably about 65 and he lives to 83, so that will be 18 years.

584
00:47:52,000 --> 00:47:57,000
So you're going to get $250,000 in 18 years.

585
00:47:57,000 --> 00:48:04,000
What would that be worth if you tried to get the same amount now that it was worth in 18 years?

586
00:48:04,000 --> 00:48:24,000
Okay, so you will receive $250,000 in 18 years.

587
00:48:24,000 --> 00:48:51,000
If the discount rate is, let's say, 8.9% compounded, let's say, semi-annually,

588
00:48:51,000 --> 00:49:01,000
how much is that worth now?

589
00:49:01,000 --> 00:49:09,000
In other words, here, you want a present value.

590
00:49:09,000 --> 00:49:14,000
Well, the core formula, all you have to do is turn it around.

591
00:49:14,000 --> 00:49:19,000
So that I divide both sides by 1 plus r to the t.

592
00:49:19,000 --> 00:49:30,000
So the future value divided by 1 plus r to the t is the present value.

593
00:49:30,000 --> 00:49:36,000
So those two are the core of all finance formulas that you would probably encounter.

594
00:49:36,000 --> 00:49:38,000
Now, a little side comment here.

595
00:49:38,000 --> 00:49:41,000
You'll see me oftentimes do this.

596
00:49:41,000 --> 00:49:51,000
Instead of fv over 1 plus r to the t, I'll do fv times 1 plus r to the negative t.

597
00:49:51,000 --> 00:49:58,000
You remember from algebra, it's long ago, the reciprocal is the negative of the exponent.

598
00:49:58,000 --> 00:50:02,000
Now, the reason I do it is this.

599
00:50:02,000 --> 00:50:04,000
It's purely practical.

600
00:50:04,000 --> 00:50:11,000
When you divide, if you've got a complex calculation in the denominator,

601
00:50:11,000 --> 00:50:17,000
you're asking to forget a parenthesis or something and get the wrong answer.

602
00:50:17,000 --> 00:50:23,000
This way, it stays all on one line, and all you have to do is remember to put a negative on the exponent.

603
00:50:23,000 --> 00:50:24,000
That's the only reason.

604
00:50:24,000 --> 00:50:33,000
You can do it the way that second line, but the third line, is just less likely to get you into trouble with it.

605
00:50:33,000 --> 00:50:35,000
So now we've got our two formulas.

606
00:50:35,000 --> 00:50:40,000
Over here, we'll use the future value.

607
00:50:40,000 --> 00:51:05,000
The future value will be $15,000 times 1 plus r.0575 over quarterly 4 to the number of years 15 times 4.

608
00:51:05,000 --> 00:51:10,000
Don't forget to put that exponent in parentheses for God's sake.

609
00:51:10,000 --> 00:51:12,000
Yes?

610
00:51:12,000 --> 00:51:15,000
What did you get for.0575?

611
00:51:15,000 --> 00:51:18,000
.0575, I forgot the 5.

612
00:51:18,000 --> 00:51:22,000
Thank you.

613
00:51:22,000 --> 00:51:24,000
The percentage.

614
00:51:24,000 --> 00:51:26,000
Sorry about that.

615
00:51:26,000 --> 00:51:29,000
.0575.

616
00:51:29,000 --> 00:51:31,000
Now remember, you're going to do this on a calculator.

617
00:51:31,000 --> 00:51:35,000
Just straight up run the calculator, which I'll do.

618
00:51:35,000 --> 00:51:38,000
You would use.0575.

619
00:51:38,000 --> 00:51:44,000
But if you're using a finance function of some kind, you would use 5.75.

620
00:51:44,000 --> 00:51:51,000
So if you use a calculator or Excel, it's.0575.

621
00:51:51,000 --> 00:51:54,000
Now over here, we've got a present value.

622
00:51:54,000 --> 00:52:03,000
So the present value on this problem would be the future value, 250,000 times 1 plus,

623
00:52:03,000 --> 00:52:21,000
the APR here is.089 over, where the hell, semi-annual 2, to the negative 18 times 2.

624
00:52:21,000 --> 00:52:28,000
And again, don't forget to use parentheses on that exponent.

625
00:52:28,000 --> 00:52:32,000
So now we'll just lock and load those and get it done.

626
00:52:32,000 --> 00:52:33,000
It turned off.

627
00:52:33,000 --> 00:52:38,000
Why does a calculator save battery that doesn't need a battery?

628
00:52:38,000 --> 00:52:39,000
Okay, anyway.

629
00:52:39,000 --> 00:52:44,000
I'll do the future value first, which is, if I can see that far over,

630
00:52:44,000 --> 00:53:07,000
15,000 times, open parenthesis, 1 plus.0575,.0575 divided by,

631
00:53:07,000 --> 00:53:10,000
what was the compoundings on that?

632
00:53:10,000 --> 00:53:11,000
Quarterly.

633
00:53:11,000 --> 00:53:18,000
Quarterly, thank you, divided by 4, close the parenthesis.

634
00:53:18,000 --> 00:53:25,000
Now we raise that to the, and open parenthesis, you want to trap that,

635
00:53:25,000 --> 00:53:38,000
what was that, 15 times 4, close the parenthesis, and there you go.

636
00:53:38,000 --> 00:53:42,000
$35,318.60.

637
00:53:42,000 --> 00:53:48,000
Now I, almost always, it's a little different in a few cases,

638
00:53:48,000 --> 00:53:52,000
but usually I'll just say, to the nearest dollar,

639
00:53:52,000 --> 00:53:57,000
and I'll give you a couple of dollars each way, so you would put in an answer,

640
00:53:57,000 --> 00:54:07,000
35,319, but I'd give you the credit if you did that dollar off either way.

641
00:54:07,000 --> 00:54:16,000
Now the other one, 250,000, this is the present value, times, open parenthesis,

642
00:54:16,000 --> 00:54:30,000
1 plus.089, close the parenthesis, to the, now open parenthesis,

643
00:54:30,000 --> 00:54:38,000
and now here, don't put in a minus sign, put in the negative, right there,

644
00:54:38,000 --> 00:54:57,000
that negative, 18 times 2, close the parenthesis, about 116,000, no, 11, my ass.

645
00:54:57,000 --> 00:55:01,000
Oh, I see what I did. Want to see a trick?

646
00:55:01,000 --> 00:55:07,000
I don't have to key in the whole thing, I can say, use the yellow button, enter,

647
00:55:07,000 --> 00:55:11,000
and look at that, it comes back up.

648
00:55:11,000 --> 00:55:14,000
I forgot to put in the, divided by 4.

649
00:55:14,000 --> 00:55:24,000
So I've got to do insert, second insert, divided by 4.

650
00:55:24,000 --> 00:55:40,000
Yep, enter, 113,000, that's better, 113,210 dollars.

651
00:55:40,000 --> 00:55:45,000
Now, how do you get rid of this calculator?

652
00:55:45,000 --> 00:55:52,000
Right click, exit without saving state, and it's gone.

653
00:55:52,000 --> 00:55:58,000
Okay, now you've got a quiz, and once you do your quiz, that's all I have for you today, I thank you.