What Is the Time Value of Money?
Interest is the link between today and later; it is the price of time with money.
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1.What is the time value of money?
Interest is the link between today and later; it is the price of time with money.
2.Which are the three reasons money today beats money later?
Interest forgone is an opportunity cost.
3.Marge puts 1,000 at 4 percent for one year. What does she have?
After one year she has 1,000 times 1.04.
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Sources (3)
- MIT OpenCourseWare 1.001 (Fall 2023), Martland: Project Evaluation, Vol. II, Essay 2: Equivalence of Cash Flows (Abschnitt Time Value of Money, S. 22-23)
- Eigene Berechnung (Zinseszins/Barwert, jährliche Verzinsung, keine Steuern oder Gebühren)
- Eigene Berechnung (synthetische Rechenbeispiele)
Education only. Not financial advice.