joyline yegon
Apr 15
List five different applications of time value of money?
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Apr 15
1. Investment analysis: Time value of money is used to evaluate the potential return on investment for various financial opportunities, such as stocks, bonds, real estate, and other assets.
2. Loan amortization: Time value of money is used to calculate the monthly payments and total interest costs associated with loans, mortgages, and other forms of debt.
3. Retirement planning: Time value of money is used to determine how much money individuals need to save each month in order to achieve their desired retirement income goals.
4. Capital budgeting: Time value of money is used to evaluate the profitability of long-term investment projects and determine whether they are worth pursuing.
5. Insurance planning: Time value of money is used to calculate the present value of future insurance payments and premiums, helping individuals and businesses make informed decisions about their insurance needs.
2. Loan amortization: Time value of money is used to calculate the monthly payments and total interest costs associated with loans, mortgages, and other forms of debt.
3. Retirement planning: Time value of money is used to determine how much money individuals need to save each month in order to achieve their desired retirement income goals.
4. Capital budgeting: Time value of money is used to evaluate the profitability of long-term investment projects and determine whether they are worth pursuing.
5. Insurance planning: Time value of money is used to calculate the present value of future insurance payments and premiums, helping individuals and businesses make informed decisions about their insurance needs.
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