Question

Time Value of Money, Practical Applications in Business and Personal Decisions

If you have put money in a savings account, made monthly auto or mortgage payments, or paid down your student loan ahead of time you have inherently applied TVM.

1. Discuss how you may have used TVM in a recent investment or loan decision and explain some of the TVM details that may have been involved in your transaction.

2. If you have not used TVM in the past financial transactions explain potential TVM applications you would encounter in future business or personal transactions.

3. Please list references or in-text citations

Answer 1

1. I am a student who has taken the student loan, so I guess this is the where I have encountered with time value of money. I haven't started to pay off the loan, so the outflow of money from my side hasn't been started but obviously TVM has come into the picture and the amount that I have taken till now has increased in value due to TVM.

About a couple of months ago, I purchased a mobile phone from amazon on EMI's, so that's encounter of mine with TVM and have been involved in transactions. The inflow transaction was only in the start when I paid through card. Then, I have to pay an equal amount of EMI for 6 month.

2. I guess potential use of TVM in future for me would be when I will buy car or home on loan.

3. No citations since this is my own story.

Please do rate me and mention doubts, if any, in the comments section.