Here is the synopsis of our sample research paper on Time Value of Money Calculations. Have the paper e-mailed to you 24/7/365.
Essay / Research Paper Abstract
This 13 page paper provides answers a set of five questions asked by the student, requiring calculations concerning the time value of money. These include calculating future values of existing funds compounding interest, as well as present value calculations, and calculations to assess investment in investment amounts needed, as either a lump sum or an annual contribution, in order to gain a target amount at a specific future date. The paper provides the answers and explains the way in which the calculation should take place. The calculations are also shown. The bibliography cites 2 sources.
Page Count:
13 pages (~225 words per page)
File: TS14_TEtimevalcalc.doc
Buy This Term Paper »
Unformatted sample text from the term paper:
the amount of money that will be needed in 14 years time. In this question we assume that the current cost of building would be 433,587,925 and that the rate
of interest will be 4%. The calculation takes the cost for the year and then adds on the cost added by inflation. So, if the construction was to take
place after 1 year only, the cost increased by 4%. However, when calculation the time value of money this operates in a compound manner; the cost at the end of
year one is therefore carried forward to year two, and inflation of 4% is applied to the entire amount. This is added and then carried forward and the same process
takes place each year; taking the cost of the year before and adding inflation. This calculation is shown in table 1, all figures are rounded to whole numbers. Table
1 Calculation of construction costs in 14 years time Year Amount at beginning of year Inflation of 4% Total at end of year 1 433,587,925 17,343,517 450,931,442 2 450,931,442
18,037,258 468,968,700 3 468,968,700 18,758,748 487,727,448 4 487,727,448 19,509,098 507,236,546 5 507,236,546 20,289,462 527,526,007 6 527,526,007 21,101,040 548,627,048 7 548,627,048 21,945,082 570,572,130 8 570,572,130 22,822,885 593,395,015 9 593,395,015 23,735,801 617,130,815
10 617,130,815 24,685,233 641,816,048 11 641,816,048 25,672,642 667,488,690 12 667,488,690 26,699,548 694,188,238 13 694,188,238 27,767,530 721,955,767 14 721,955,767 28,878,231 750,833,998 This tells us that the cost in 14 years time,
assuming that inflation remains at a constant 4%, would be 750,833,998. However, it should be noted that where there is only a slight variance on the rate of inflation this
could have a significant impact on the final figure, due to the impact of compounding. Question 2 In this question the firm needs a specific amount in 26
...