time value of money (TVM) - Finance/Accounting

Time Value of Money

The concept of time value of money is one of the most important topics in finance you will need to be familiar with as a financial manager. It is the basis of how all assets are valued. 

For this Discussion, read this week’s resources and feel free to go over some of the time value of money (TVM) problems from the course text using Excel or a financial calculator to understand the concepts. 

Write a 250- to 300-word explanation of compounding and discounting as two TVM concepts. Also, explain the types of annuities and compare any two of them. In your post, state why these concepts are important for both managers and investors to build wealth. 

Be sure to support your work with specific citations from the Learning Resources and any additional sources.

·       Learning Resources

Ø  Ross, S. A., Westerfield, R. W., & Jordan, B. D. (2017). Essentials of corporate finance (9th ed.). New York, NY: McGraw-Hill Irwin.

§  Chapter 4, “Introduction to Valuation: The Time Value of Money” (pp. 97-117)

• • • Chapter 5,  “Discounted Cash Flow Valuation” (pp. 122–154)