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Private Wealth Management: The Complete Reference for the Personal Financial Planner, Ninth Edition, 9th Edition by Jerry Rosenbloom, G. Victor Hallman

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3

Valuation Concepts in Wealth Management

A number of concepts concerning how amounts of money may be built up or distributed are important to many aspects of private wealth management. For example, they affect capital accumulation and investment planning, accumulating funds for educational expenses, and accumulating assets for retirement, among others. In addition, the tax law requires the use of certain valuation factors in determining present values for estate planning purposes and for the tax treatment of below-market loans. These concepts will be discussed in this chapter.

CAPITAL ACCUMULATION CONCEPTS

Simple Interest Versus Compound Interest

Simple interest (return) is just the application of an interest rate (or rate of return) to a sum ...

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