From the Inside Flap
Understanding financial transactions—whether involving investing, borrowing, or lending—requires an understanding of the time value of money (TVM), as well as the financial mathematics that go along with it. And while TVM is an essential aspect of finance, there aren't many resources that take the time to fully explain it.
In this book, the experienced author team of Pamela Peterson Drake and Frank Fabozzi fully expand upon the type of TVM concepts usually presented as part of an overview given in other general finance books. Throughout these pages, various TVM concepts and principles are discussed, with the authors offering examples in each chapter to reinforce the tools and techniques covered. Problems and detailed solutions—demonstrated using two different financial calculators, as well as Excel—are also provided at the end of each chapter, while glossary terms are included in an appendix, to familiarize you with basic terms.
Divided into two comprehensive parts—The Basics of the Time Value of Money and A Few Applications—this comprehensive guide can help you analyze almost any financial transaction and evaluate cash flows to determine values at different points in time or returns on investments. Written with both the aspiring and experienced financial professional in mind, Foundations and Applications of the Time Value of Money:
- Deals with the compounding and discounting of lump sums—translating single values through time
Shows how valuing series of cash flows is a simple extension of discounting or compounding lump sums
Demonstrates how to calculate the annual percentage rate, the effective annual rate, and the internal rate of return for financial transactions
Looks at loans and how they may be amortized
Focuses on deferred annuities—which are typically used within the retirement arena—and other "saving-for-future-spending" scenarios in which there is more than one withdrawal of funds in the future
Addresses the valuation of stocks and bonds using TVM mathematics
Rounding out this detailed discussion, Peterson Drake and Fabozzi examine the applications of the TVM mathematics with regard to: evaluating whether to get an MBA, deciding whether to lease or buy a car, and whether gold is a good investment. And while this is not a personal finance book, the authors chose examples that might interest you in immediately applying the techniques outlined here.
Making more informed financial decisions relies on a firm grasp of the time value of money. This book has the insights and advice needed to achieve such a goal.
From the Back Cover
In this latest collaboration from Pamela Peterson Drake and Frank Fabozzi, the authors provide comprehensive coverage of the time value of money and fully expand upon related concepts that are usually presented as part of an overview in other general finance books.
Chapter by chapter, various time value of money concepts and principles are discussed and many examples are used to reinforce the tools and techniques covered. Problems and detailed solutions—demonstrated using two different financial calculators, as well as Excel—are also provided at the end of each chapter, while glossary terms are included in an appendix, to familiarize you with basic terms.
Divided into two comprehensive parts, this reliable resource:
Understanding the time value of money is essential, and with this reliable resource as your guide, you'll quickly gain a firm grasp of its many aspects and real-world applications.
