The time value of money is the value of money figuring in a given amount of interest earned over a given amount of time. For example, 100 dollars of today's money invested for one year and earning 5 percent interest will be worth 105 dollars after one year. Therefore, 100 dollars paid now or 105 dollars paid exactly one year from now both have the same value to the recipient who assumes 5 percent interest; using time value of money terminology, 100 dollars invested for one year at 5 percent interest has a future value of 105 dollars.
The method also allows the valuation of a likely stream of income in the future, in such a way that the annual incomes are discounted and then added together, thus providing a lump-sum "present value" of the entire income stream.
All of the standard calculations for time value of money derive from the most basic algebraic expression for the present value of a future sum, "discounted" to the present by an amount equal to the time value of money. For example, a sum of FV to be received in one year is discounted (at the rate of interest r) to give a sum of PV at present: PV = FV − r•PV = FV/(1+r).
Money – Introduction:
The money is written in many ways and it's calculated to using the cents, dollars.
money is marked in particular way. Cents may be write with the ¢ sign and dollars is write with the dollar sign ($)
Any time stop the decimal points when Calculate decimals
Example :
$125.23
125 is the dollar amount. and the 0.23 is the cents
Adding Money - Example 1:
What is the Sum of the two Amounts?
543 + 87¢= $ 543.87 = ¢ 54,387
Adding Money - Example 2:
Find out the cents are involved in 8 dollars, 2 dimes and 6 pennies worth? Find out the cents are involved in 5 dollars, 7 dimes and 5 pennies worth? Adding money for given moneys?
Calculate by hundreds 8 times for the 8 dollars 100, 200, 300, 400, 500, 600, 700, 800
Calculate by tens for the 2 dimes: 810,820
Calculate by ones for the 6 pennies: 821, 822,823, 824, 825, 826
Answer: 8 dollars, 2 dimes and 6 pennies are worth 826¢
826¢ is the same as $8.26 since there are 100 cents per dollar
Calculate by hundreds 5 times for the 5 dollars 100, 200, 300, 400, 500
Calculate by tens for the 7 dimes: 510,520, 530, 540, 550, 560, 570
Calculate by ones for the 5 pennies: 571, 572,573, 574, 575
Answer: 5 dollars, 7 dimes and 5 pennies are worth 575¢
575¢ is the same as $5.75
Adding the both answers in dollars:
Answer 1 + Answer 2 = Answer
826¢ + 575¢ = 1401¢
Converting cents to dollars
`1401/100` = 14.01$
Answer:
14.01$
Adding Money - Example 3:
Find out the cents are involved in the 8 dollars, 5 dimes and 8 pennies worth?
Calculate by hundreds 8 times for the 100 dollars 100, 200, 300, 400, 500, 600, 700, 800
Calculate by tens for the 5 dimes: 810,820, 830, 840, 850
Calculate by ones for the 8 pennies: 851, 852, 853, 854, 855, 856, 857, 858
Answer: 8 dollars, 5 dimes and 8 pennies are worth 858¢
858¢ is the same as $8.58
Adding Money - Example 4:
Find out the cents are involved in the 5 dollars, 3 dimes and 2 pennies worth?
Calculate by hundreds 5 times for the 5 dollars 100, 200, 300, 400, 500
Calculate by tens for the 3 dimes: 510,520, 530
Calculate by ones for the 2 pennies: 531, 532
Answer: 5 dollars, 3 dimes and 2 pennies are worth 532¢
532¢ is the same as $5.32
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