Dear Friend Today I will talk on the topic, yes it is “Value of Money”. M oney plays very vital role in our life. Exchaging goods for other goods are now obsolete. With the help of money we can purchase any think we wish. Philoshipicallly speaking with money we cannot by everything but practically it is the basic thing which calculate the status of a person. If we divide the people in 3 category Rich, medium and poor than we can say that the poor people understands the value of money more than the other two. In india there are so many village where people lives below poverty line some of them are compelled to sell their children to other just to earn their bread & butter. This is really very alarming situation that after 65 yrs of independence we are so backward. There are both positive and negative impact of money on our life. Let us first talk about the positiveimpact. 1. People become Hard worker and committed becoz these two things are required most to earn money. 2. They can rule the materialistic world. 3. It helps in economic growth of a country Now, the negative impact of money 1. It changes everything, even the behavior of a person. They became insensitive, unfriendly and some rude also. 2. Some people (mostly youngster) wants to earn money within fortnight and to fulfill their goal they adopts wrong ways such as murder, robbery etc, which ultimately leads them to wrong place. 3. Health of an individual also affected, means they took lot of stress and even they do not concentrate on their daily routing. They worked day & night and also avoided basic things towards their health, due to which they eclipsed with so many decease like BP, diabetic etc. In short I would like to summarize that money is very important to live smooth life, if you do not have money nobody will stand by you and if you have enough money the same people worship you, but as I already told you that we cannot buy everything with money like happiness, love, faith these eternal things are...

...FINANCE
TIME VALUE OF MONEY
The aim of this paper is to learn about time-value-of-money to make optimal decisions as manger must understand the relationship between a dollars present today and a dollar in the future.
Time value of money
Today’s financial managers often have to compare cash payments that occur on different dates. To make optimal decisions, the manager must understand the relationship between a dollar today [present value] and a dollar in the future [future value]. The time value of money is basically a measurement or perspective of an investment you might make while still considering its future decrease in value due to inflation. The time value of money allows us to understand what that inflation or decrease may become in the future or present. Most importantly, the time value of money concept allows us to decide whether it would be beneficial placing a sum of money into investment where it collects value from interest, or whether that same amount of money would be most valuable in the present due to inflation rates.
Understanding the concept of time value of money
It is very important for managers to understand the concept of time value of...

...ACFI 340 – TAKE HOME QUIZ - FALL, 2011
Below you will find a series of independent questions involving present value concepts. Show all factors used in present value computations and indicate the table that was used (FV of $1, PV of $1, etc). If you use a financial calculator, show the key strokes you used to compute the answer: N, i/y, PV, FV and PMT
Please download a copy of this quiz and type your answers after each question. Each student should design his/her own spreadsheets. Where amortization schedules are required, they should be labeled as exhibits and attached at the end of your quiz. On mortgage amortization schedules, attach only the first and last page of the schedule.
No “canned program” spreadsheets should be used. While you may discuss the quiz with one another, you are expected to prepare your own solutions independently of other students. Obviously identical spreadsheets will result in a penalty of 30 points on your total score.
a. Sacks Corporation bought a new machine and agreed to pay for it in 5 equal installments of $40,000 at the end of each of the next 5 years. Assuming that the prevailing rate of 6% applies to this contract, how much should Sacks record as the cost of the machine?
b. Design amortization schedules showing the payments under the assumption:
1. Interest is included in the face amount of the note.
2. The note is an interest bearing note.
c. Prepare the entry to...

...Time Value of Money
The time value of money (TVM) or, discounted present value, is one of the basic concepts of finance and was developed by Leonardo Fibonacci in 1202. The time value of money (TVM) is based on the premise that one will prefer to receive a certain amount of money today than the same amount in the future, all else equal. As a result, when one depositsmoney in a bank account, one demands (and earns) interest. Money received today is more valuable than money received in the future by the amount of interest we can earn with the money. If $90 today will accumulate to $100 a year from now, then the present value of $100 to be received one year from now is $90.
To fully understand time value of money one must first understand a few terms. Present value and future value are totally different. They also have their disadvantages and advantages; it just depends on how they are used. Of course, present value is what you have right now at this present time. While future value is the amount of money you will have at a given time in the future. Future value has a tendency to be deep; meaning that who knows the future. Interest rates fluctuate everyday; so one can be...

...Time Value of Money
“Money has a time value associated with it and therefore a dollar received today is worth more than a dollar to be received in the future” (Block, Hirt, 2005). The time value of money may be based on the concept that one would prefer to receive a fixed payment today rather than the same fixed payment at a future date. This paper discusses some of the key components of timevalue of money and identifies the application of time value of money in various businesses.
Commercial banks use various time value of money formulas daily. One example of the application of time value of money in commercial banks is through mortgages. Using the formula for present value of an annuity, a bank will solve the formula to determine the monthly payment amount, the borrower’s monthly mortgage payment.
Credit card financial service companies are commonly known to issue private student loans. Therefore, credit card companies would use the time value of money to determine loan payment schedules and the number that students most fear, the ending balance, the future value of the loan. Credit card companies would use the formula for present value of an annuity to determine the payment schedule, and they would...

...education of your two children. They are two years apart in age; one will begin college 15 years from today and the other will begin 17 years from today. You estimate your children’s college expenses to be $23,000 per year per child, payable at the beginning of each school year. The annual interest rate is 5.5 percent. How much money must you deposit in account each year to fund your children’s education? Your deposits begin one year from today. You will make your last deposit when your oldest child enters college. Assume four years of college
Solution:
Cost of 1 year at university = 23,000
N=4
I=5.5%
PMT=23,000
CPT PV = 80,618.45
For the first child the PV = 80,618.45/ (1.055) ^14 = $38,097.81
For the second child the PV = 80,618.45/ (1.055) ^16 = $34,229.07
Therefore the total cost today of your children’s college expense will be the addition of the 2
= $72,326.88
This is the present value of my annual savings, which are an annuity, so to get the amount I am supposed to save each year would be:
PV=72,326.88
N=15
I=5.5
CPT PMT = 7,205.6
57. Calculating Annuity Values:
Bilbo Baggins wants to save money to meet three objectives. First, he would like to be able to retire 30 years from now with retirement income of $25,000 per month for 20 years, with the first payment received 30 years and 1 month from now. Second, he would like to purchase a cabin in...

...Time Value of Money
Time Value of Money
University of Phoenix
Believe it or not many people through out the years thought that by putting money to the side, under the mattress or, even in the cookie jar that eventually one day they would be rich. Well not to spoil the surprise but the years it would take to make one rich by those means are far off and nothing in between. This is where TimeValue of Money comes in. Time Value of Money is the idea that a dollar today is worth more than a dollar in the future, even after the adjustments of inflation, interest rates, and appreciation until the time come for the dollar in the future to be received. Simply stated invest. There are a variety of financial applications of the time value of money. This paper will identify different financial application, and components of a discount and interest rate. The goal is to list various financial applications, and explain the components of discount and interest rates.
Financial Applications
The time value of money can be applied to many everyday financial decisions. Suppose a parent wants to set aside present funds for their child’s educational future. Several factors will impact the ability to yield a return, such as the number of periods involved and the applied interest...

...Time Value of Money
The time value of money relates to many activities and decision in the financial world. “Understanding the effective rate on a business loan, the mortgage payment in a real estate transaction, or the true return on an investment depends on understanding the time value of money” (Block, Hirt, 2005). The concept of time value of money helps determine how financial assets are valued and how investors establish the rates of return they demand. Many different types of companies use the time value of money, such as commercial banks, credit card companies, insurance companies, retirement advisors, and the state government. As an individual or company, the importance of understanding how each of these company’s services can affect ones overall cash position is very important.
When determining the “future value, we measure the value of an amount that is allowed to grow at a given interest rate over a period of time” (Block, Hirt, 2005). When determining the present value one would reverse the method for calculating future value. Future value and present value calculations may also deal with annuities rather than single amounts, “which may be defined as a series of consecutive payments or receipts of equal amount” (Block,...

...TIME VALUE OF MONEY
Time value of money is useful in making informed business decisions. For example the "net present value method" can be used to help decide the best alternative among multiple alternative uses of a firm or personal financial resources. By discounting various alternatives to their "present value" one can compare the alternatives. Time value of money can also answer such questions as what one's investment will be worth at a certain point of time in the future, assuming a certain interest rate. Time value of money can also be used to compute such useful information as car, mortgage and other loan payments. Another use of time value of money in accounting is reporting of certain long-term assets and liabilities.
Time value of money is based on the principle of compound interest. Each time there is a compounding period the new principal is increased by the interest from the previous period.
Converting Before Using the Tables
When using the tables, you may need to convert if, for example, in a lump sum situation there are more than one compounding periods in a year. Or you may need to convert (to monthly compounding) if, for example, you are working with an annuity situation involving a car loan that involves monthly rather than annual...

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