Essay: Time Value of Money

This is an canvass on meter observe of money. For example if a dollar sign mark is invested today at 8% annual interest pasture then at the can of the year the dollar would be $1.08.\n\n\nFor example if a dollar is invested today at 8% annual interest set then at the fetch up of the year the dollar would be $1.08. This would be the future(a) assess of the dollar. And the 8% interest would be the come in of return and the succession period is one year. eon the puzzle hold dear of $1.08 would be $1.\n\nA lump kernel future payments or adjoin sequential payments or avail which are expected in future can be converted into a parallel value today. On the new(prenominal) hand the value of a single payment or annuities today can be calculated to be in future. The key components when evaluating the Time foster of Money are: (Gallager, 1996)\n\nThe quantity that is to be saved or invested which is called the present value of the inwardness to be invested\nThe future v alue of the present amount would be sometime in future when the amount is compounded with a fixed interest rate. The future value is expected to be greater then the present value.\nPayments are the equal evenly-spaced immediate payment flows from the investments.\nThe rate of return on the principle which is called the interest rate which can be annual or semiannual or monthly usually state as a percentage.\nThe time period for which the money would be saved. This is not in term of the outlet of years just in terms of the number of payments that would be make.\nThere are antithetic formulae to calculate the different values in TVM.\n large-hearted order custom made Essays, Term Papers, Research Papers, Thesis, Dissertation, Assignment, check Reports, Reviews, Presentations, Projects, Case Studies, Coursework, Homework, Creative Writing, unfavorable Thinking, on the topic by clicking on the order page.\n If you requirement to get a all-encompassing essay, order it on our we bsite:

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