Download Time Value of Money

OpenStax-CNX module: m15865
1
Time Value of Money
∗
Rudy Lopes
This work is produced by OpenStax-CNX and licensed under the
Creative Commons Attribution License 2.0
†
Abstract
The time value of money refers to the idea that the value of a sum depends on its place in time, with
a sum today worth as much as a larger sum in the future given appropriate interest compounding. These
tutorials explain the concepts behind interest, compounding, present value, and future value.
About Interest Rates1 - The topic of interest rates are more complicated than you might think. This
tutorial covers the relevant terminology, including APR, APY, and the yield curve.
Compound Interest2 - Calculating compound interest, as used in mortgages, is now much easier. Learn
how to nd the interest using the principal, number of compounding periods, and interest rate. Use your
own values for an added bonus!
Compound Interest Made Simple3 - Compound interest is the method of nding interest where interest
is charged on the principal as well as the interest already accumulated. Review a simpler method for nding
compound interest with this tutorial.
Compound Interest - Bottomless Worksheet4 - Use this Bottomless Worksheet to get endless practice
calculating compound interest from the principal, number of periods, and interest rate. Ten new problems
to solve, a printed copy, and an answer sheet are all only a click away.
Present Value5 - This Flash tutorial walks you through the steps to calculate present value from the
future value, interest rate, and number of maturity periods. You can enter your own values, too.
Present Value - Bottomless Worksheet6 - Get endless practice with this Bottomless Worksheet in calculating present value from future value, number of periods, and interest rate. At a button-click it creates ten
more problems for you to solve, complete with printed copy and answer sheet.
Simple Interest7 - Calculating simple interest is a snap with this Formula Solver. Learn how to nd the
interest using the principal, number of interest periods, and interest rate. Use your own values to check your
homework!
Simple Interest - Bottomless Worksheet8 - With this Bottomless Worksheet you can get endless practice
on calculating simple interest from the principal amount, number of periods, and interest rate. A printed
copy, answer sheet, and another ten problems are all just a button-click away.
∗ Version
1.4: May 11, 2010 7:55 am -0500
† http://creativecommons.org/licenses/by/2.0/
1 http://www.college-cram.com/study/nance/interest/about-interest-rates-and-the-time-value-of-money/
2 http://www.college-cram.com/study/nance/time-value-of-money/compound-interest/
3 http://www.college-cram.com/study/nance/time-value-of-money/compound-interest-made-simple/
4 http://www.college-cram.com/study/nance/time-value-of-money/compound-interest-bottomless-worksheet/
5 http://www.college-cram.com/study/nance/time-value-of-money/present-value/
6 http://www.college-cram.com/study/nance/time-value-of-money/present-value-bottomless-worksheet/
7 http://www.college-cram.com/study/nance/time-value-of-money/simple-interest/
8 http://www.college-cram.com/study/nance/time-value-of-money/simple-interest-bottomless-worksheet/
http://cnx.org/content/m15865/1.4/
OpenStax-CNX module: m15865
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Calculating Future Value9 - Future value is a term given to the amount of money we would have at some
point in the future, based on what happens between now and then. Use this tutorial to learn how to calculate
the future value of an annuity given the present value, periodic interest rate, and number of periods.
Discounting Future Value10 - Discounting the future value is the process of guring out what that future
value is in present-day money. Use this tutorial to learn how to calculate the discounted future value given
the future value, periodic interest rate, and number of periods.
Annuities - Present Value and Future Value11 Annuities are dened as a stream of payments made over
time. Use this tutorial to learn how to solve present and future value of annuity problems with nancial
calculators or spreadsheet functions.
9 http://www.college-cram.com/study/nance/time-value-of-money/calculating-future-value/
10 http://www.college-cram.com/study/nance/time-value-of-money/discounting-future-value/
11 http://www.college-cram.com/study/nance/time-value-of-money/annuities-present-value-and-future-value/
http://cnx.org/content/m15865/1.4/