November 2013
Beginner
864 pages
36h 10m
English
Content preview from Financial Accounting, 9th EditionAppendix G
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Appendix G 
Time Value of Money
Learning Objectives
After studying this appendix, you should be able to:
[1] Distinguish between simple and compound interest.
[2] Solve for future value of a single amount.
[3] Solve for future value of an annuity.
[4] Identify the variables fundamental to solving present value problems.
[5] Solve for present value of a single amount.
[6] Solve for present value of an annuity.
[7] Compute the present value of notes and bonds.
[8] Compute the present values in capital budgeting situations.
[9] Use a financial calculator to solve time value of money problems.
Would you rather receive $1,000 today or a year from now? You should prefer to receive the $1,000 today because you can invest the $1,000 and earn interest on it. As a result, you will have more than $1,000 a year from now. What this example illustrates is the concept of the time value of money. Everyone prefers to receive money today rather than in the future because of the interest factor.
1
Distinguish between simple and compound interest.
Nature of Interest
Interest is payment for the use of another person's money. It is the difference between the amount borrowed or invested (called the principal) and the amount repaid or collected. The amount of interest to be paid or collected is usually ...
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I'm always learning. So when I got on to O'Reilly, I was like a kid in a candy store. There are playlists. There are answers. There's on-demand training. It's worth its weight in gold, in terms of what it allows me to do.