Financial Management (lesson 3)

esson 3

Welcome to Lesson 3!

Money has time value. A dollar to be received in the future is worth less than a dollar received today. The ability to compare future dollars with present dollars is crucial to financial decision making. Many financial decisions involve the current outlay of funds, for investments are made in the present. The returns on these investments occur in the future. The concepts presented in this chapter are basic to an understanding of the valuation of securities, the cost of a loan, and capital budgeting. This week you will review a key concept-
The Time Value of Money. As you work through the discussion and task activities you will understand how important this financial tool is to financial management.

Review the rules of playing the games click on Investopedia – Simulator How-To Guide. There are 15 links to review: review 6-10 in the how-to guide.

Class Discussion – Time Value of Money

Research Time- Let’s Search the Databases

In a group research these concepts and find at least one example of each with a peer-reviewed article.

Review Key Concepts

  • Future value of a dollar
  • Present value of a dollar
  • Future value of an annuity of a dollar
  • Present value of an annuity of a dollar
  • Compounding and discounting
  • Nonannual compounding

After reading the assigned Simulator how-to play guide, write a summary of the first 5 steps to take in the game. Include how this connects with the concept of Time Value of Money.