ACCT 2101 Chapter 12: 12_Time Value of Money
Document Summary
In order to move forward to module 13 (chapter 12 planning for capital investments), it is important for you to have a basic understanding of the time value of money principles. Therefore, we have included appendix a which discusses this topic as module 12. This module includes a discussion of interest and the difference between simple and compound interest. It also includes an explanation of present value and future value and calculating each as a single amount or annuity. Tables are provided in the appendix which will allow you to calculate these amounts without long manual calculations or the use of a financial calculator. A financial calculator is not required for this course. Interest is payment for the use of another person"s money. It is the difference between the amount borrowed or invested (called the principal) and the amount repaid or collected.