In: Accounting
A demonstration of time value using three alternative fact patterns using a $500,000 principal investment over three different time periods and at three different rates. Consider using an annuity under at least one of the fact patterns. (managerial accounting)
Please find the demonstration of time value using three alternative fact patterns using a $500,000 principal investment over three different time periods and at three different rates. Consider using an annuity under at least one of the fact patterns.
The time value of money is a concept that money available at the present time is worth much more than the identical sum in the future due to its potential earning capacity. This finance principle primarily holds that provided money must earn interest which ultimately means that any amount of money is worth more the sooner it is received.