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HCS 219 Week 3 Time Value of Money Worksheet
Resource: Time Value of Money Worksheet
You decide it would be good to send Lauren some additional information regarding time value of money concepts.
Complete the Time Value of Money Worksheet.
Click the Assignment Files tab to submit your assignment.
Time Value of Money Worksheet
Part 1: Complete the following table by inserting your responses to the questions. Cite any sources you use.
| Define the time value of money. | |
| Provide a real-world example for the time value of money. | |
| Why is time such an important factor in financial matters? | |
| How would you use the time value of money to your financial benefit? |
Part 2: Complete the following tables by calculating the ratios.
| Amount | Compounding period | Rate of interest | Present value |
| $100,000 | Annual | 6% for 10 years | |
| $70,000 | Annual | 4% for 15 years |
| Initial cost of investment | Periods of useful life | Estimated annual net cash inflow generated | Look-up table value | Rate of interest |
| $75,000 | 10 | $10,190 | ||
| $56,000 | 6 | $12,115 |
| Purchase price of equipment | Period of useful life | Annual revenue generated per year | Operating costs associated with revenue | Depreciation expense per year | Payback period result |
| $550,000 | 10 years | $100,000 | $32,000 | $55,000 | |
| $350,000 | 10 years | $80,500 | $36,000 | $35,000 |