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# Time Value of Money

The Time Value of Money

You have been asked by the local elementary school to come and explain the concept of the time value of money.

a) Discuss this topic as you might explain it to an 8-year old child. What would you say?

b) What demonstration will you perform to help them understand the topic?
Submit thoughtful, substantial, and appropriate responses early in the week to allow time for your peers to read and review them.

c) Is the explanation of the concept and demonstration effective and appropriate for an 8-year old child? Support your comments with valid reasons.

#### Solution Preview

The Time Value of Money

You have been asked by the local elementary school to come and explain the concept of the time value of money.

a) Discuss this topic as you might explain it to an 8-year old child. What would you say?

Tell the kids: If you have a dollar today, it is worth more than having a dollar next year. The time value of money means that if you have a dollar today, you have the choice of spending it now and getting what you want right away or investing it in the bank so it will have an interest. That is why having a dollar now is worth more than having a dollar next year.

b) What demonstration will you perform to help them understand the topic?
Submit thoughtful, substantial, and appropriate responses early in the week to allow time for your peers to read and review them.

Show a picture of a clock followed by an equal sign and a dollar sign. Ask the child what he/she sees ...

#### Solution Summary

The solution discusses how to explain the time value of money to an eight year old child. Demonstration on the concept and an a reflection on how effective the lesson is are also included aside from references.

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