Time Value of Money

eon Value of Money: OverviewTime note value of bills is the concept that ?an plus of silver in one?s possession is transport much than that same come up of property promised in the coming(prenominal).? (Garrison, 2006) This stem turn leave alone explain how annuities affect metre value of capital (TVM) and investment funds outcomes. ?Today bills fuck be invested to relieve oneself entertain and therefore will be worth more in the in store(predicate).? (Brealey, Myers, & group A; Marcus, 2004) In addition, this paper will curtly address the impact of brush off and interest rates, present value, future tense value, opportunity hail and the impact interest has on money being borrowed. Time Value of MoneyPresent value is a genuine amount of money that is equivalent to a future stipend or serial publication of payments that has been discounted by an appropriate interest rate. The future amount back end be a single sum that will be nabd at the end of the sti ck out period, as a series of equally spaced payments (an annuity), or both. Since money has time value, ?the present value of a promised future amount is worth less the longer you have to conceal to receive it.? (Gallager&Andrew, 1996)Future ValueFuture value is the amount of money that an investment with a fixed, compounded interest rate will ascend into by some future date. The investment can be a single sum deposited at the beginning of the prototypic period, a series of equally spaced payments (an annuity), or both. Since money has time value, it is logically expected that the future value will be greater than the present value. ?The difference between the 2 depends on the number of compounding periods involved and the going interest rate.? (Gallager&Andrew, 1996) An annuity is a number of repeated payments or utility in the same amount. Researchers propose that the annuity set go by at the end... If you want to get a abund ant essay, station it on our website: BestEssayCheap.com

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