Identify and discuss at least two ways you might be able to

Identify and discuss at least two ways you might be able to use the time value of money calculations in your personal life.

Solution

Example-1

suppose your bank offers you a CD with a two-year maturity, a stated annual interest rate of 8 percent compounded quarterly. You decide to invest $10,000. Then the CD be worth $ 11,716 .59 at maturity

Example-2

You plan to invest €20,000 per year in a stock index fund for the next 30 years. Historically, this fund has earned 9 percent per year on average. Assuming that you actually earn 9 percent a year, Money will you have available for retirement is €2,726,150.77