Factors That Affect the Time Value of Money

A. The future value of an annuity is unaffected by the amount of each annuity payment.

To be successful it is important to look ahead to the future. The future is very important to thing about for many reasons. To be well off in the future its good to know about money, and what a person does with it. People should put it in retirement plans and such things because a person has to think to their self if they want to live comfortably like they do now.

12. Today, you deposit $10,750 in a bank account that pays 3 percent simple interest. How much interest will you earn over the next 7 years?

The goal of this course is to get you thinking about personal finance issues at a point in your life when you still have time to benefit from the power of time in generating wealth to accomplish your other life goals. The financial decisions you make early in life with determine in great extent the quality of life you will enjoy later, especially given the turbulent and uncertain economic conditions. Money isn’t everything, but a lack of it will impact almost every aspect of your life and those who surround you.

One of the negative externalities of the Federal Reserve's zero interest rate policy to stimulate lending and borrowing has been the effect on savers and investors throughout the economic landscape. Historically low rates on CD's, bonds, and treasuries have forced investors to take on more risk in order to meet their required return on investment. Amidst this backdrop Granny Smith has a difficult task ahead of her in saving for her grandchild's college education. Financially savvy, Granny Smith has scoured the internet and found a five year CD at Ally Bank paying 1.72 percent (Bank Rate.com. 2012. PP. 1). She is reluctant to tie up her money for longer than five years given that the stated rate is actually below inflation, which in effect provides her a negative real rate of return. However, she cannot take the risk of losing her $25,000 capital in the stock market, so even if this return over the next five years is the best she can get, that will at least ensure she will have not lost principal.

Future initiatives with financial education can change the landscape of an individual’s life and the economy in which we live. If there is limited focus on learning about personal finances we continue to set our economy up for constant failure. There is a substantial amounts of education provided to school age children that does not directly impact their financial education for their future. In high school individuals learn

The cash flows for an annuity must all be equal, and they must occur at regular intervals, such as once a year or once a month.

Return on investment (ROI) time value of money for the investment may not be applicable by the time the investment start making money, I would need to evaluate the investment, the risk of the investment, and the future value of the investment. Other factors that will contribute to the ROI is the interest amount on the borrowed money for the

Those born with a silver spoon in their mouth are destined to be wealthy. Not only because they come from old money, but because those who come from old money teach their kids about money. Although economics and finances have recently been added to the curriculum of American schools, there is only so much that can be learned from a book. This kind of knowledge is gained mainly through life-experiences and there are many people who believe it is the parent’s job to make sure their children are prepared to deal with finances in the future. Many people who are not of old money are financially illiterate; they have little to no education about finances. They may know how to make money, however, they probably have no idea how to keep their money. Therefore, they have no idea how to teach their children how to keep money. For this reason, a large portion of the population is focused on get-rich-quick schemes hoping to “make it big” or “strike it rich”.

You invest $1000 at 6% compounded annually and want to know how much money you will have in 5 years. What does the $1000 represent?

Refer to question 9. What would the future value be if interest is compounded monthly?

Thesis: Today I will inform the audience of the power of saving small amounts of money for the future and how compound interest works in their favor when they start saving as soon as possible.

How to properly manage money is something that should be taught to young people because it is a very important asset in everyday life. “Total consumer debt in the United States stands at nearly $2.6 trillion dollars. That works out to be nearly $8,500 in debt for every man” (Anderson). Many times teenagers are known for “throwing away” their money by spending it on unnecessary things. This is something that could easily be avoided if students were taught the proper techniques on saving and spending money. There are many different skills that students could learn if personal finance was taught in the school system. Managing money is one of those very important skills and would help to lessen the number of young people spending irresponsibly instead of

Both Blunt and Mathas knew this would be an uphill battle, however. Historically, investment advisors preferred to actively manage their clients’ funds, whereas an immediate annuity represented an irrevocable one-time transaction. In addition, most advisors favored a fee-based business model rather than one in which they would receive only a one-time commission. Complicating matters, research suggested that consumers were almost completely unaware of the existence or benefits of immediate annuities. Yet Mathas had faced doubts about this product before, and he genuinely believed that, in the ever-changing landscape of retirement planning, immediate annuities offered great benefits for those in or approaching their retirement years.

     An ordinary annuity is a series of regular payments where each payment is made at the end of the payment period. The payment period is the length of time between payments. Payments are usually made annually, semiannually, quarterly,