{[ promptMessage ]}

Bookmark it

{[ promptMessage ]}

Time Value Intro

# Time Value Intro - \$100.00 P My Savings Account balance is...

This preview shows page 1. Sign up to view the full content.

Time Value of Money Introduction Assume I deposit \$100.00 today in a savings account. My Savings account pays interest at a rate (i) equal to 6% per year. How much will I have in my savings account after a period of 1 year? Answer: The Period is 1 Year 1 N The INTEREST I earn is \$100.00 * 6% or: \$6.00 I Plus I have my original DEPOSIT of:
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: \$100.00 P My Savings Account balance is: \$106.00 F The point here is that \$100 today is not equal to \$100 one year from now. Would you loan me \$100 if I promised to repay you \$100 one year from now? Probably not!! Why? Because I would deposit the \$100 earn \$6 then repay you \$100....
View Full Document

{[ snackBarMessage ]}

Ask a homework question - tutors are online