8. Time Value of Money 1: Present and Future Value

Time Value of Money 1: Present and Future Value

Learning Outcomes

At the completion of this chapter, you will:
 
A. Understand the importance of compound interest and time.
B. Understand the definition of the term investment.
C. Grasp basic financial terminology (the language of finance).
D. Solve problems related to present value (PV) and future value (FV).
 
I strongly recommend that you borrow or purchase a financial calculator to help you complete this section. Although you can do many of the calculations discussed in this section on a standard calculator, the calculations are much easier to do on a financial calculator. Calculators like the Texas Instruments (TI) Business Analyst II, TI 35 Solar, or Hewlett Packard 10BII can be purchased for under $35. The functions you will need for calculations are also available in many spreadsheet programs, such as Microsoft Excel. If you have a computer with Excel, you can use Learning Tool 12:  An Excel Based Financial Calculator, which is a spreadsheet-based financial calculator available on this website.
 

Chapter Reading

Please read the chapter on "Time Value of Money 1: Present and Future Value" (PDF)

 

Slide Presentation

Please click here for the PowerPoint slide presentation (PPT) for this chapter, or here for the slides as a PDF.

 

Video

NOTE: Information for this chapter is included as part of the video used in the chapter on Debt and Debt Reduction.

 

 

Assignments

Here are the assignments for "Time Value of Money 1: Present and Future Value"

 

Tools

The following learning tools may be helpful with this chapter:

Financial Calculator Tutorial

Learning Tool 12:  An Excel Based Financial Calculator

 

Additional Materials