Explain the concept of time value of money

Reference no: EM131904974

Assignment 1: Discussion-Time Value of Money

Time value of money analysis has many applications-both personally and professionally. The calculations can be performed using Microsoft Excel, factor tables, or a financial calculator to help make informed decisions, such as planning for retirement, loan decisions, and capital projects.

The concept of time value of money helps managers value cash flows and assess risk within the organizations.
In this assignment, you will discuss specific situations where the time value of money is applied in personal and professional situations.

Tasks: 1. Share any professional and personal decisions you made in which the concept of time value of money was utilized and include the following:

- The specific decision for which you used time value of money.

- The manner in which you applied the concept.

- The tools you used to complete the analysis, including the timeline.

- An explanation of how using the concept helped you reach a more accurate decision than if time value of money had not been utilized.

Your response should consist of a minimum of 300 words and demonstrate critical thinking and analysis.

2. Download the MS6014_M2A1_workbook.xlsx template, and using the appropriate Excel financial functions, do the following:

- Determine the present value of $75,000 discounted at 6% over 6 years.

- Determine the future value of $100,000 invested today at 4% for 5 years.

- Determine what annual payment will need to be invested if you have $10,000 today and want it to grow to $100,000 over 20 years at 4.5%.

Information related to above question is enclosed below:

Attachment:- MS6014_M2A1_workbook.rar

Reference no: EM131904974

Questions Cloud

Explain the balance sheet equation : In terms of McGladrey and Pullen's Reading & understanding financial statements: A guide to financial reporting, explain the balance sheet equation in 300 words

Explain why is understanding the health care system : Explain Why is understanding the health care system at the local level important to consider when planning an EBP implementation?

Compute the materials price variance : Compute the materials price variance and compute the materials usage variance

Which theory makes most sense for implementing ebp project : Compare and contrast two change theories, and determine which theory makes the most sense for implementing your specific EBP project. Why?

Explain the concept of time value of money : Time value of money analysis has many applications-both personally and professionally. The calculations can be performed using Microsoft Excel, factor tables.

Calculate the standard cost per bicycle : Calculate the standard cost per bicycle for 2018, showing separately the materials, labor, and variable and fixed overhead components

Describe approaches or strategies that have previously used : In the Previous Approaches section, you will describe the approaches or strategies that have been previously used or are currently used on the topic.

What is the estimated purchase price of the home : Upon graduating from Argosy University with a degree in Finance, John Simple found a great job as a banking officer with Capital Two Bank in Dallas.

Calculate the unknown interest rate : Linkon invested $1000 in the business. After a period of 10 years the money was $2000. Calculate the unknown interest rate

User Account

All Pages