Question

Give an example of a personal finance experience you have had which involved the concept of...

Give an example of a personal finance experience you have had which involved the concept of the time value of money. What have you learned?

Homework Answers

Answer #1

Investment in mutual funds involved time value of money. The average return of my portfolio provides 15%.
With monthly investment of 1000$ I want to invest until retirement. This amount will be compounded monthly and provide a lumpum after 30 years. This involves time value of money.

Learnings are
1. Investments at a fixed rate involves time value of money.
2. Monthly savings of small from an early age will provide a large lumpsum at retirement age.
3.Wise investment early can secure an early retirement without lowering the standard of life.
4. All the benefits are due to time value of money. Had the money not been itilised it would not turn into lumpsum in future.

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