Chapter 5 – Time Value of Money Concepts

Time Value of Money (TVM) is one of the most fundamental concepts of Financial Management.  Unfortunately, it tends to cause a lot of confusion among students.

There are several reasons for this confusion.  First, TVM deals with mathematics, and some students have problems with mathematical concepts.  Second, students sometimes try to solve TVM problems in the abstract as opposed to “drawing” a picture of the different TVM components.  Third, some students use a calculator to solve TVM problems without really understanding the significance of what they are punching in to the calculator.  Whatever the reason, getting past the confusion with TVM can significantly increase a student’s mastery of the subject area.


Textbook readings: Chapter 5 – “Time Value of Money Concepts”, pages 238 – 264.


Narrated PowerPoint Lectures: The lecture  for this chapter has been broken into five parts.  Part 1 focuses basic terminology related to time value of money concepts.  Part 2 looks future value of a single sum. Part 3 deals present value of a single sum. Part 4 turns its attention to future value of an annuity. Part 5 completes the discussion with a focus on present value of an annuity.


Narrated Solutions to Suggested End of Chapter Exercises and Problems


Publisher solutions to suggested end of chapter exercises and problems