## CHECK THESE SAMPLES OF The Value of Money

...? Question Introduction In economics and finance, **money** is said to have a time **value**. This in essence meansthat a unit of **money** e.g. a dollar that people currently possess is preferred over a unit that they expect to receive in the future. The act of putting off the application of a unit of **money** implies they are postponing on consumption. To convince people to postpone their consumption and invest or lend their **money**, they demand a return over time for their **money**. This return comes in the form of capital or interest gain. This therefore means that, assuming annual returns are reinvested, an amount of **money** invested...

5 Pages(1250 words)Research Paper

...? Time **Value** of **Money** Introduction Time **value** concept is an important concept in a financial world. It gives us clarity about as to how we should go ahead comparing two different investment avenues in terms of present **value**. It will not be possible to compare straight two securities giving different returns in two different time frames; looking at absolute **values**, it becomes almost impossible to arrive at conclusion, which one is more beneficial in terms of financial return to us. The comparison and decision becomes possible if those cash flows or future streams are converted to its present **values** applying appropriate discounting factor for that time periods. (Biger, N. 2008) While applying this concept, it is required to take... after...

3 Pages(750 words)Research Paper

...?Introduction The objective of this paper is to get an understanding of the concept of the time **value** of **money**. We first study the two important concepts in the area: Present **value** and the Future **Value** and its importance to the subject of corporate finance. We then look at some questions which calculate the present **value** of the future cash flows and the future **value** of present cash investments. 1. The concept of time **value** of **money** is critical to the world of Finance and is very often the first subject that is taught in a Corporate Finance class. It is based on the simple premise that “A penny in hand today is worth more than a penny in hand tomorrow”. This is on the basis of assumption that the **money** in hand today can be invested... in...

4 Pages(1000 words)Essay

...?Time **Value** of **Money** The situation that a client of the company is facing is whether to buy a fixed income security i.e. bond, which will pay $ 1000000 a year from today. The detailed features of the bond, whether it is a coupon paying bond or a zero coupon bond is not known. However, Time **Value** of **Money** analysis needs to be conducted in order to find out what payment should be made for the bond now in order to get back $ 1000000 after one year. However, there are significant other factors that need to be considered while conjuring up to the present **value** of the bond. Before calculating the discount rate and **valuing** the security to its...

3 Pages(750 words)Research Paper

...Time **Value** of **Money** Annuities are a series of equal payments that are made in return of a future lump sum amount. A fine example of an annuity wouldbe of a mortgage loan that is usually taken in order to pay off a loan for some property. These are equal payments whose sum equals the **value** of the future **value** of the payment. Time **value** of **money** concept forms the basis of this annuity concept (Gordon, 1999). To understand the concept better, one must understand the concept of opportunity costs. Opportunity costs are the benefit that a person sacrifices by using **money** in a particular way. Therefore, to make a certain...

3 Pages(750 words)Essay

...Week1Q's Interest Interest, in simple words, is the cost of borrowing an amount of **money**. Usually, the interest rate is bifurcated into two or more parts; the real rate of interest; the inflation premium is the increase in the **value** of **money** that occurs in that certain period of time; and the risk premium that is basically a compensation that the lender gets for taking the risk of lending **money** to the person.
Simple Interest
Simple interest is similar to the definition provided above; it does not take into account the accumulated interest of the previous years and usually incorporates the interest dues of the current year. Simple interest is the principle amount times...

3 Pages(750 words)Essay

...TIME **VALUE** OF **MONEY** Time **value** of **money** is a term that measures the increase or decrease in the **value** of **money** with respect to time. The buying powerassociated with certain amount of **money**; do change as the time passes and multiple factors such as inflation, exchange rates, interest rate and other fluctuations economic conditions come into play. Two factors are central in this concept; present **value** and future **value** of **money** (Homer and Leibowitz, 269-276).
One of the important financial decisions that many people make at individual level, is regarding their retirement...

1 Pages(250 words)Essay

...Time **Value** of **Money** al Affiliation: Question Time **value** of **money** is the consideration of the change in **value** of a given amount of **money** over a given period of time. This is because there are certain factors within the economy that create a state where a given sum of **money**, say $1,000, cannot purchase the same amount of items presently, as it could 5 or 10 years ago. This concept is used to analyse investment in terms of the **value** added to the initial investment over a given period of time.
Question 2
An ordinary annuity is a sequence or chain of equal payments on an investment that is made at the end of...

3 Pages(750 words)Essay

...Time **Value** of **Money** Affiliation “Take heed if your are buying or selling annuities”, is an article that provides an imformatic look at the ever changing regulatory landscape, and its relation to annuity products. It also elaborates on the responsibilities a fiduciary has when it comes to selling these products to a client. The article discusses the criteria, legal factors and issues an attorney has to consider as a trust fiduciary on annuity investments in the US.
Various federal and state rules have been trying to narrow down the sale of equity indexed annuities to suitable investors. It is important that lawyers should note the key issues in annuity sale and investment. The relationship between a trustee and the beneficiaries... that the...

3 Pages(750 words)Essay

...**Money** and Banking In answering the question of how inflation affects the functions of **money**, it is important to some of the common function of **money**. These include Medium of exchange in trade, store of **value** or measure of **value**, a standard of deferred payment as well as a unit of account to make accounting records for transactions involving **money**. On the other hand, inflation referrers to a situation where the general prices of goods and services are increasing continuously for a significant period say one year. In other words, inflation leads to decline in **money** **value** over time. Consequently, inflation...

2 Pages(500 words)Coursework