Unit 4 Time Value of Money part 1.pptx (CFM22A2)

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Unit 4:

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UNIT 4
Part A

, LEARNING OUTCOME




Students should be able to explain the time value of
money concept and perform simple and advanced
calculations of single amount (lump sums), annuities,
perpetuities and mixed streams of cash flows.




Time value of money

, ASSESSMENT CRITERIA



1. All the variables involved in time value of money calculations based
on single amounts or lump sums are accurately solved;
2. Ordinary annuities and annuities due are accurately compared
and advanced calculations to solve all the variables pertaining to
annuities including PV, FV, PMT, N and I are correctly performed;
3. Calculations on problems in time value of money relating to mixed
and multiple cash flows are accurately performed;
4. How loans are amortized or paid off and how perpetuities work are
understood and problems relating to loan repayment calculations
and perpetuities are accurately solved;
5. How interest rates are quoted is understood and nominal and
effective interest rates are clearly differentiated.




Time value of money




6.