Value of Money Is Perhaps the Most Case Study

Open, View, and/or
Download this Document

Total Length: 614 words ( 2 double-spaced pages)

Total Sources: 3

Page 1 of 2

value of money is perhaps the most critical concept in modern financial theory. According to Bianco & Poole (2010), "While executives and academics often disagree, they all agree that the time value of money (TVM) is the most important finance concept that should be taught in introductory finance classes" (Gup, 1994) Undergraduate business students are typically exposed to time value of money concepts in more than one course. Introductory accounting and financial management courses always cover TVM. Students are often taught this subject in mathematics and other general business courses. Many techniques are utilized for teaching and solving TVM problems including formulas, tables, financial calculators and spreadsheets." (Bianco, Poole, 2010)

In my opinion, the idea for TVM is important due to the notion that a dollar invested today increase the value of dollars earned today due to the value of receiving P + i, which is principal plus interest.

Stuck Writing Your "Value of Money Is Perhaps the Most" Case Study?

View All Our Example Value of Money Is Perhaps the Most Case Study

Have A Custom Example Essay Written

According to Schwartz (1991) "The basic concept of the time value of money is that cash received at a later date is not equal to the same amount of cash which is presently on hand. The cash on hand has earning power and can be invested for growth." (Schwartz, 1991)

Schwartz is referring to the power of simple and compound interest (Croft, 2010). The TVM calculation is a function of receiving simple or compound interest payments, or a payment of (x) at a (y) future time. The payment (x) received at time (y) will be the initial principle invested added to the return on principle produced from the interest earned over the time period y-1.

Calculations

$600 USD invested over time period of five years to receive a rate of interest of 9% per annum is to say that an investor is willing to give up $600.....

Show More ⇣

     Open the full completed essay and source list


OR

     Order a one-of-a-kind custom essay on this topic


sample essay writing service

Cite This Resource:

Latest APA Format (6th edition)

Copy Reference
"Value Of Money Is Perhaps The Most" (2011, February 25) Retrieved July 7, 2025, from
https://www.aceyourpaper.com/essays/value-money-perhaps-most-49845

Latest MLA Format (8th edition)

Copy Reference
"Value Of Money Is Perhaps The Most" 25 February 2011. Web.7 July. 2025. <
https://www.aceyourpaper.com/essays/value-money-perhaps-most-49845>

Latest Chicago Format (16th edition)

Copy Reference
"Value Of Money Is Perhaps The Most", 25 February 2011, Accessed.7 July. 2025,
https://www.aceyourpaper.com/essays/value-money-perhaps-most-49845
   

Open, View, and/or
Download this Document
order custom essay example