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Time Value of Money (PowerPoint PPT)
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HIGHLIGHTS
BENEFITS OF DOCUMENT
- Provides of PV and FV of Annuity Due vs. Ordinary Annuity
- Provides of the Formula of Amortization
- Provides of Rate of Return Formula
DOCUMENT DESCRIPTION
This product (Time Value of Money) is a 86-slide PowerPoint presentation (PPT), which you can download immediately upon purchase.
Time Value Of Money
Lecture Outline
1. PV and FV of Annuity Due vs. Ordinary Annuity
2. Nominal rate (iNom)
3. Periodic rate (iPer )
4. Effective Annual Rate (EAR = EFF%)
5. Amortization
6. Greatest Future Wealth
7. Greatest Present Wealth
8. Rate of Return
The time value of money is the widely accepted conjecture that there is greater benefit to receiving a sum of money now rather than an identical sum later. It may be seen as an implication of the later-developed concept of time preference.
The time value of money is among the factors considered when weighing the opportunity costs of spending rather than saving or investing money. As such, it is among the reasons why interest is paid or earned: interest, whether it is on a bank deposit or debt, compensates the depositor or lender for the loss of their use of their money. Investors are willing to forgo spending their money now only if they expect a favorable net return on their investment in the future, such that the increased value to be available later is sufficiently high to offset both the preference to spending money now and inflation (if present); see required rate of return.
If you're like most people, you would choose to receive the $10,000 now. After all, three years is a long time to wait. Why would any rational person defer payment into the future when they could have the same amount of money now? For most of us, taking the money in the present is just plain instinctive. So at the most basic level, the time value of money demonstrates that all things being equal, it seems better to have money now rather than later.
But why is this? A $100 bill has the same value as a $100 bill one year from now, doesn't it? Actually, although the bill is the same, you can do much more with the money if you have it now because over time you can earn more interest on your money..
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Source: Best Practices in Business Case Development PowerPoint Slides: Time Value of Money PowerPoint (PPT) Presentation, UJ Consulting
ABOUT THE AUTHOR: UJ CONSULTING
UJ Consulting
Untung Juanto ST., MM. Founder of UJ Consulting. He is professionally experienced business and management consultant in several local and multinational companies.
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UJ Consulting has published 168 additional documents on Flevy.
DETAILS
This business document is categorized under the function(s): Corporate Finance Operations
It applies to All Industries
File Type: PowerPoint 
(ppt)
File Size: 1.7 MB
Number of Slides: 86 (includes cover, transition, & marketing slides)
Related Topic(s): Business Case Development
Purchase includes lifetime product updates. After your purchase, you will receive an email to download this document.
Initial upload date (first version): Apr 10, 2022
Most recent version published: Apr 11, 2022
