Examine why a dollar received today is worth more than the dollar received tomorrow, learn the difference between compounding and discounting, and learn about annuities and amortization of loans. In other words, you will explore time value of money (TVM), which is the foundation of finance that deals with the mathematics behind the valuation of financial instruments such as stocks, bonds, and mortgages.
It is necessary to be able to apply the knowledge you have gained by classifying market transactions and financial instruments and by describing how financial markets work.
Introduction
TVM is the foundation of mathematical finance that can be applied to corporate as well as personal finances. The TVM concept can be applied to single and multiple cash flows. However, in real life, you often come across financial applications that require multiple or annuity cash flows. In this assessment, you will apply the TVM concept to single and annuity cash flows.
