Week 3 Discussion
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 time value of money (TVM) problems from the course text using Excel or a financial calculator to understand the concepts.
Post by Day 3 200- to 250-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.
Read a selection of your colleagues’ postings.
Respond by Day 6 to two or more of your colleagues’ postings in one or more of the following ways:
- Ask a probing question.
- Share an insight from having read your colleague’s posting.
- Offer and support an opinion.
- Make a suggestion.
- Expand on your colleague’s posting.
Return to this Discussion in a few days to read the responses to your initial posting. Note what you learned and the insights you gained from the comments your colleagues made.
Note: Refer to the Discussion Template in this week’s Learning Resources for your main post and response.
- Ross, S. A., Westerfield, R. W., & Jordan, B. D. (2012). Essentials of corporate finance (8th ed.). New York, NY: McGraw-Hill/Irwin.
- Chapter 4, “Introduction to Valuation: The Time Value of Money” (pp. 97–121)
- Chapter 5, “Discounted Cash Flow Valuation” (pp. 122–165)