Assignment Requirements for week 3

Complete: a minimum of 1,000 words (total assignment) and three scholarly sources.

Book :

Melicher, Ronald W., and Edgar A. Norton *Introduction to Finance: Markets, Investments, and Financial Management, Enhanced eText*. Wiley Global Education US, 2016. [Savant Learning Systems].

1. Why does money have a “time value”?

2. There is a saying that “time is money”. What is meant by that? How is this the same – or different – than the idea of the time value of money?

3. Find the future value of $5,000 invested in each of the following situations:

a. 5 percent for 10 years

b. 7 percent for 7 years

c. 9 percent for 4 years

4. What is the present value of $5,000 to be received in each of the following situations:

a. at end of 10 years with a 5% discount rate.

b. at the end of 7 years when the appropriate interest rate is 7%.

c. at the end of 9 years using an interest rate of 9%.

5. What is the return on an investment (ROI) that costs $500 today and will return $800 at the end of 4 years?