Question

What two types of time-value-of-money calculations are used to account for the time value money from...

What two types of time-value-of-money calculations are used to account for the time value money from interest earned?

Business   Finance   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

Two types of calculation for accounting time value of money from interest earned are Present Value and Future Value of Interest paying amount.Present value discounts all the principal and interest earned to present value whereas Future compounds the amount and interest to future value.

PV = Amount/(1+r)n where r = Rate , N is number of periods
FV = Amount*(1+r)nwhere r = Rate , N is number of periods

Please Discuss in case of Doubt

Best of Luck. God Bless
Please Rate Well

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
What are some things time value of money can be used for?
What are some things time value of money can be used for?
"Time Value of Money " The time value of money is a critical concept to understand...
"Time Value of Money " The time value of money is a critical concept to understand in accounting, especially when dealing with loans, investment analysis, and capital budgeting decisions. The time value of money concept can be used to decide which projects to start and what investments to make. You can also utilize the time value of money concept in your personal life. Provide two (2) decisions you may need to make that could involve the time value of money....
Time Value of Money a. What is the present value of a $2,000 lump sum to...
Time Value of Money a. What is the present value of a $2,000 lump sum to be paid in six years if interest rate is 5%? b. Suppose you deposit $1,000 today in an account that pays 8% APR. How many years will it take the account balance to grow to $3,000 if interest is compounded quarterly?
1.   (8 marks) Time Value of Money a.   What is the present value of a $2,000...
1.   Time Value of Money a.   What is the present value of a $2,000 lump sum to be paid in six years if interest rate is 5%?                                   b.   Suppose you deposit $1,000 today in an account that pays 8% APR. How many years will it take the account balance to grow to $3,000 if interest is compounded quarterly?  
(8 marks) Time Value of Money   What is the present value of a $2,000 lump sum...
Time Value of Money   What is the present value of a $2,000 lump sum to be paid in six years if interest rate is 5%?                                                                       Suppose you deposit $1,000 today in an account that pays 8% APR. How many yearswill it take the account balance to grow to $3,000 if interest is compounded quarterly?
How can the time value of money equation be modified to include more complex calculations?
How can the time value of money equation be modified to include more complex calculations?
What is time value of money? What problems may arise if time value of money is...
What is time value of money? What problems may arise if time value of money is not taken into consideration while making transactions? Explain theoretically how can these problems be dealt with?
Time Value of Money I - Worksheet Identify the table that should be used for each...
Time Value of Money I - Worksheet Identify the table that should be used for each of the following situations in the space provided, then show the calculations to solve the problem below. FV – Future Value of 1 PV – Present Value of 1 FVA – Future Value of an Annuity PVA – Present Value of an Annuity _________ 1. Tom bought a zero-coupon bond with an 8% yield. (A zero-coupon bond does not pay interest, but the value...
Time value of money calculations can be solved using a mathematical equation, a financial calculator, or...
Time value of money calculations can be solved using a mathematical equation, a financial calculator, or a spreadsheet. Which of the following equations can be used to solve for the future value of an ordinary annuity? 1) PMT x {1 – [1/(1 + r)nn]}/r 2) PMT x {[(1 + r)nn – 1]/r} 3) FV/(1 + r)nn 4) PMT x {[(1 + r)nn – 1]/r} x (1 + r)
If a manager was not concerned with the time value of money, from which two capital...
If a manager was not concerned with the time value of money, from which two capital budgeting methods should the manager choose? Multiple Choice BET or IRR ARR or Payback NPV or IRR NPV or Payback BET or NPV #31
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT