# Value of Money Essay

**Pages:** 3 (706 words) ·
**Bibliography Sources:**
4 · **File:** .docx · **Level:** College Senior · **Topic:** Economics

SAMPLE EXCERPT . . .

This can help a financial manager explain why some so-called discretionary funds should be redirected from present-day expenses to savings. This is an important lesson, because many people assume that they can begin their retirement savings when they make more money, without considering that inflation costs and other cost-of-living adjustments (growing children, college accounts, increased health expenditures) may already require devotion of those extra resources, and that the later they wait to do their saving, the greater the amount of present-day dollars that they will have to save in order to have the same amount of money at a projected target date. A financial manager must be able to explain this concept to people, and to get them to buy into this concept without feeling penalized by savings.

3) Calculate the future value of the following showing work:

PV=FV / (1+r) t

PV * (1+r) t = FV

FV= PV * (1+r) t

a. $54,298 if invested for five years at a 7% interest rate

FV= PV * (1+r) t

FV= $54,298 * (1+.07)5 = $76,155.75

b. $99,112 if invested for three years at a 4% interest rate

FV= PV * (1+r) t

FV= $99,112* (1+.04)3 = $111,487.52

c. $121,124 if invested for seven years at a 2% interest rate

FV= PV * (1+r) t

FV= $121,124 * (1+.02)7= $139,236.78

d. $929,129 if invested for ten years with a .9% interest rate

FV= PV * (1+r) t

FV= $929,129 * (1+.009)10= $1,016,219.86

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for $19.77 4) Calculate the present value of the following showing work

a. $455,126 to be received three years from now with a 4% interest rate

PV=FV / (1+r) t

PV=$455,126 / (1+.04)3= $404,605.36

b. $289,231 to be received five years from now with a 5% interest rate

PV=FV / (1+r) t

PV=$289,231 / (1+.05)5 =$226,620.06

c. $921,000 to be received two years from now with a 12% interest rate

PV=FV / (1+r) t

PV=$921,000 / (1+.12)2=$734,215.56

## Essay on

d. $278,111 to be received eight years from now with a 1% interest rate

PV=FV / (1+r) t

PV=$278,111 / (1+.01)8=…

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This can help a financial manager explain why some so-called discretionary funds should be redirected from present-day expenses to savings. This is an important lesson, because many people assume that they can begin their retirement savings when they make more money, without considering that inflation costs and other cost-of-living adjustments (growing children, college accounts, increased health expenditures) may already require devotion of those extra resources, and that the later they wait to do their saving, the greater the amount of present-day dollars that they will have to save in order to have the same amount of money at a projected target date. A financial manager must be able to explain this concept to people, and to get them to buy into this concept without feeling penalized by savings.

3) Calculate the future value of the following showing work:

PV=FV / (1+r) t

PV * (1+r) t = FV

FV= PV * (1+r) t

a. $54,298 if invested for five years at a 7% interest rate

FV= PV * (1+r) t

FV= $54,298 * (1+.07)5 = $76,155.75

b. $99,112 if invested for three years at a 4% interest rate

FV= PV * (1+r) t

FV= $99,112* (1+.04)3 = $111,487.52

c. $121,124 if invested for seven years at a 2% interest rate

FV= PV * (1+r) t

FV= $121,124 * (1+.02)7= $139,236.78

d. $929,129 if invested for ten years with a .9% interest rate

FV= PV * (1+r) t

FV= $929,129 * (1+.009)10= $1,016,219.86

Buy full paper

for $19.77 4) Calculate the present value of the following showing work

a. $455,126 to be received three years from now with a 4% interest rate

PV=FV / (1+r) t

PV=$455,126 / (1+.04)3= $404,605.36

b. $289,231 to be received five years from now with a 5% interest rate

PV=FV / (1+r) t

PV=$289,231 / (1+.05)5 =$226,620.06

c. $921,000 to be received two years from now with a 12% interest rate

PV=FV / (1+r) t

PV=$921,000 / (1+.12)2=$734,215.56

## Essay on *Value of Money I Would* Assignment

d. $278,111 to be received eight years from now with a 1% interest ratePV=FV / (1+r) t

PV=$278,111 / (1+.01)8=…

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Value of Money. (2012, January 30). Retrieved March 30, 2020, from https://www.essaytown.com/subjects/paper/value-money/2180173MLA Format

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"Value of Money." Essaytown.com. January 30, 2012. Accessed March 30, 2020.https://www.essaytown.com/subjects/paper/value-money/2180173.