Explore BrainMass

Importance of time value of money to individuals

This content was STOLEN from BrainMass.com - View the original, and get the already-completed solution here!

1. Why is the time value of money important for an individual to understand in regard to their private life? What can an individual do with this information?

© BrainMass Inc. brainmass.com October 25, 2018, 10:00 am ad1c9bdddf

Solution Preview

Why is the time value of money important for an individual to understand in regard to their private life?

Time value of money means that money can grow over time. Funds on hand can be invested and will be greater in the future, depending on the returns earned (interest rate). So, money today can grow. Money you will get in the future cannot be invested and grow until you get it. So, money you have now is worth more than month in the future....mainly because you can "cook it" with interest and it will grow.

Why is this ...

Solution Summary

Your discussion is 317 words and gives many examples of how the time value of money impacts individual in handling their financial affairs.

See Also This Related BrainMass Solution

Individual investors Making Investment Decisions

This assignment is concerned with your understanding of the key issues relative to portfolio analysis and investment. In completing this assignment you are to limit your scope to the US stock markets only. Use the Library, the Internet, and course resources to write a 2-page essay which you will use with new clients of your financial planning business; the essay should address the following issues and/or practices:

How individual investors make investment decisions in practice rather than in theory; and
How investors manage their funds/savings/ investments in light of current stock markets.

In your response, build upon extant portfolio theory and make sure to talk about different types of risks that investors might face and how they go about managing such risks. This means you need to consider topics such as efficient frontier and optimal portfolios; as well their relevance to investment theory. Furthermore, given the nature of the assignment, avoid bringing the brokerage industry into your discussion. In other words, assume you can invest directly in the stock market and do not need any financial intermediaries like brokerage houses.

View Full Posting Details