Transcription of 2. TIME VALUE OF MONEY
{{id}} {{{paragraph}}}
Example: bachelor of science
2. TIME VALUE OF MONEY
13 2. time VALUE OF MONEY Objectives: After reading this chapter, you should be able to 1. Understand the concepts of time VALUE of MONEY , compounding, and discounting. 2. Calculate the present VALUE and future VALUE of various cash flows using proper mathematical formulas. Single-Payment Problems If we have the option of receiving $100 today, or $100 a year from now, we will choose to get the MONEY now. There are several reasons for our choice to get the MONEY immediately. First, we can use the MONEY and spend it on basic human needs such as food and shelter. If we already have enough MONEY to survive, then we can use the $100 to buy clothes, books, or transportation. Second, we can invest the MONEY that we receive today, and make it grow.
Time Value of Money _____ 17 2.3. Single payment, future value? You decide to put $12,000 in a money market fund that pays interest at the annual rate of 8.4%, compounding it monthly. You plan to take the money out after one year and pay the income tax on the interest earned. You are in the 15% tax bracket. Find the total amount available to ...
Tags:
Information
Domain:
Source:
Link to this page:
Please notify us if you found a problem with this document: