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1.Time Value of Money.What is the time value of money? How is it related to opportunity costs? 2.Importance of the Time Value of Money.List one

1.Time Value of Money.What is the time value of money? How is it related to opportunity costs?

2.Importance of the Time Value of Money.List one reason why the time value of money is an important concept.

3.Annuity.What is an annuity?

4.Compounding.Define compounding. How is it used in financial planning?

5.Calculating Future Values.What two methods can be used to calculate future values?

6.Future Value Formula.What is the formula for determining the future value of a single sum when using the future value interest factor table? What information must be known to find the correct future value interest factor?

7.Present Value.Describe some instances when determining the present value of an amount is useful.

8.Using Proper Tables.In questions a through d, indicate whether you would use the table for determining the future value of a single sum (FVIF), the present value of a single sum (PVIF), he future value of an annuity (FVIFA), or the present value of an annuity (PVIFA).

9.You want to know how much you must deposit today to have $5,000 in five years.

10.You plan to contribute $300 per month to your company's retirement plan and want to know how much you will have at retirement.

11.You received $500 as a gift for graduation, and you want to know how much it will be worth in three years if you deposit it in a savings account.

12.You must decide between accepting a lump-sum settlement and annual payments.

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