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    Time Value and Money Description

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    From any general internet source provide a brief description of an example that illustrates the use of the time value of money. Please cite and reference the source.

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    https://brainmass.com/business/annuity/time-value-money-description-217381

    Solution Preview

    Time preference for money is an individual's preference for possession of a given amount of money now, rather than the same amount at some future time.

    Three reasons may be attributed to the individual's time preference for money:
    ? risk
    ? preference for consumption
    ? investment opportunities

    Application by Retirement plan financial service providers/Insurance companies
    Besides the above concept these organization use the compounding technique to find out the future value of annuity. They collect annuities (fixed amount after equal period) from the investor to give them a lump sum at the time of retirement or after the maturity. For example: What's the future value in 10 years of $1,000 ...

    Solution Summary

    This discusses the concepts related to Time Value and Money

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