Time Value of Money - 1028 Words

Abstract The first steps toward understanding the relationship between the value of dollars today and that of dollars in the future is by looking at how funds invested will grow over time. This understanding will allow one to answer such questions as; how much should be invested today to produce a specified future sum of money? Time Value of Money In most cases, borrowing money is not free, unless it is a fiver for lunch from a friend. Interest is the cost of borrowing money. An interest rate is the cost stated as a percent of the amount borrowed per a period of time, usually one year. The current market rates are composed of three items. The Real Rate of Interest is what compensates lenders for postponing their own spending†¦show more content†¦Opportunity cost is a basic term from the disciplines of economics and accounting. The acceptable definition of the term is, The advantage forgone as the result of the acceptance of an alternative. For example, the opportunity cost of a single glass of beer is about $7.00. The generally accepted Opportunity Cost factor, including inflation, is 6.7. Therefore, that $1.00 glass of beer cost the buyer about $7.00 in future earnings. Opportunity cost is an important concept in financial decision-making. There is a useful rule of thumb for incorporating opportunity cost into financial decision-making. If faced with a spend-or-invest trade-off and deciding to pay off debt, subtract the projected income earned on the investment to calculate a net savings. If deciding to invest, subtract the projected interest paid off on the debt to calculate net savings. The Rule of 72 is a simple financial rule that simply states that investments will double its initial amount every 72 periods that it is compounded. The formula is written like this: 72/r where: r = the rate of return per period. In other words, an initial amount such as $1000 which has a fixed rate of return of 20% will double itself in just over three and a half years, 72/20 = 3.6. This kind of financial equation is very handy to use when you need to compare investment opportunities or loans such as home loans. The Rule of 72 is commonly used in all areas of personal finance and financial planning,Show MoreRelatedTime Value of Money1033 Words   |  5 PagesTime Value of Money (TVM), developed by Leonardo Fibonacci in 1202, is an important concept in financial management. It can be used to compare investment alternatives and to solve problems involving loans, mortgages, leases, savings, and annuities. TVM is based on the concept that a dollar today is worth more than a dollar in the future. That is mainly because money held today can be invested and earn interest. A key concept of TVM is that a single sum of money or a series of equal,Read MoreTime Value of Money967 Words   |  4 PagesTime Value of Money The time value of money relates to many activities and decision in the financial world. â€Å"Understanding the effective rate on a business loan, the mortgage payment in a real estate transaction, or the true return on an investment depends on understanding the time value of money† (Block, Hirt, 2005). The concept of time value of money helps determine how financial assets are valued and how investors establish the rates of return they demand. Many different types of companiesRead MoreTime Value of Money2180 Words   |  9 PagesFinance Ââ€" Time Value of Money We earn money to spend it and we save money to spend it in the future. However, for most people spending money in the present time is more desirable since the future is unknown. We can gratify the desire to spend money today rather than in the future by knowing the basic law in finance Ââ€" time value of money. This means that a dollar today is worth more than a dollar at some time in the future. Unfortunately, people very often want to buy things at the present time whichRead MoreTime Value of Money3904 Words   |  16 PagesTime Value of Money Problems 1. What will a deposit of $4,500 at 10% compounded semiannually be worth if left in the bank for six years? a. $8,020.22 b. $7,959.55 c. $8,081.55 d. $8,181.55 2. What will a deposit of $4,500 at 7% annual interest be worth if left in the bank for nine years? a. $8,273.25 b. $8,385.78 c. $8,279.23 d. $7,723.25 3. What will a deposit of $4,500 at 12% compounded monthly be worth at the end of 10 years? a. $14,351.80 b. $14,851.80 c. $13,997.40 d. $14Read MoreTime Value of Money5284 Words   |  22 Pages12/9/2012 Chapter 9 The Time Value of Money 1 Chapter 9- Learning Objectives ïÆ' ¼ Identify various types of cash flow patterns (streams) that are observed in business. ïÆ' ¼ Compute (a) the future values and (b) the present values of different cash flow streams, and explain the results. ïÆ' ¼ Compute (a) the return (interest rate) on an investment (loan) and (b) how long it takes to reach a financial goal. ïÆ' ¼ Explain the difference between the Annual Percentage Rate (APR) and the Effective Annual RateRead MoreTime Value of Money2092 Words   |  9 PagesTime Value of Money The time value of money (TVM) or, discounted present value, is one of the basic concepts of finance and was developed by Leonardo Fibonacci in 1202. The time value of money (TVM) is based on the premise that one will prefer to receive a certain amount of money today than the same amount in the future, all else equal. As a result, when one deposits money in a bank account, one demands (and earns) interest. Money received today is more valuable than money received in the futureRead MoreTime Value of Money2124 Words   |  9 PagesTime Value of Money: Simple Interest versus Compound Interest Outline I. Applications of Time Value of Money 1.1 Example One 1.2 Example Two 2. Interest 2.1 What is Interest? 2.2 Three Variables of Interest 1. Principal 2. Interest Rate 3. Time 2.3 Why is Interest Charged? 3. Simple Interest 3.1 What is Simple Interest? 3.2 Simple Interest Formula 4. Compound Interest 4.1 What is Compound Interest? 4.2 Compound Interest Formula Read MoreTime Value of Money712 Words   |  3 Pageswill pay the bank over the life of the loan? $123,945.04 4. What is the effective rate of interest on a CD that has a nominal rate of 7.25 percent with interest compounded monthly? EAR = (1+.0725/12)^12 – 1 = 7.5% 5. What is the future value of $4,950 placed in a saving account for six years if the account pays 3%, compounded quarterly? PV = 4,950 N = 6 x 4 = 24 I =3/4 = .75% Pmt = - FV = $5,922.24 6. Your firm, Vandelay Industries, has just leased a $32,000 BMW for youRead MoreTime Value of Money and Present Value1154 Words   |  5 Pagescollege 15 years from today and the other will begin 17 years from today. You estimate your children’s college expenses to be $23,000 per year per child, payable at the beginning of each school year. The annual interest rate is 5.5 percent. How much money must you deposit in account each year to fund your children’s education? Your deposits begin one year from today. You will make your last deposit when your oldest child enters college. Assume four years of college Solution: Cost of 1 year atRead MoreTime Value of Money Essay708 Words   |  3 PagesTime Value of Money Project Show all your work! Name _________________ 1. If Mrs. Beach wanted to invest a lump sum of money today to have $100,000 when she retired at 65 (she is 40 years old today) how much of a deposit would she have to make if the interest rate on the C.D. was 5%? a. What would Mrs. Beach have to deposit if she were to use high quality corporate bonds an earned an average rate of return of 7%. b. What would Mrs. Beach have to deposit if she

Abnormal Psychology Assignment Free Essays

The textbook also explains four mechanisms that help people deal with adversity and foster a good mental health and defines good mental health as the presence of cognitive, social and emotional functioning. Early Childhood From the individual level, the textbook gives several examples of risk factors. Was lucky enough to not have any behavioral, socio-emotional, cognitive or biological risk factors that were present in the earlier years Of my life that I am aware of. We will write a custom essay sample on Abnormal Psychology Assignment or any similar topic only for you Order Now However, my younger brother was diagnosed with a learning disability. Although it didn’t affect me directly, some of my friends teased my brother and in turn, affected the way thought about myself in relation to my family. In the family domain, I was raised in a dual-parent household. The textbook states that a single parent household is a risk factor. My parents rarely fought and they have a loving relationship to this day. I would like to say that this is a protective factor. Having the support of both of my parents really fostered my self-esteem and my sense of well-being. This became very evident in middle school when I struggled with my friendships. My parents were always there to support me. When I was very young, my parents were unemployed for a few years. As a protective factor to offset the employment and no income, my parents were able to monitor me and I excelled in my academics for most of my childhood. My parents immigrated to Canada one year before I was born. They were fearful of what would happen when China was given back control of Hong Kong in 1 997, which is where my parents are from. Therefore, they came to Canada to avoid the politics and start a new life for themselves. Coming to a democratic country was a big change for them as well as any children they were going to have. I have grown up without the same pressures and rules that may have been imposed if my parents had stayed in Hong Kong. My self-esteem may have been hindered drastically and may have been more afraid to speak out on certain matters because of the way the government is run. The fact that politics is no longer a worry in my early childhood significantly reduced the amount of stress I would’ve felt had been living my parents’ home city. The textbook mentions democracy as an example of a protective factor in the socio- political level. The school system in Hong Kong is also much more stressing on a child even from an early age. Everyone is very competitive in Hong Kong and I’m not sure that would have enjoyed growing up in that type of environment as the pressures to succeed would have been a lot to handle. Was able to develop in a relatively low-stress environment until high school. Mid-childhood Throughout elementary school, I had many friends, which created a great environment for me to develop the skills that were necessary to my social functioning. A presence of social, cognitive and emotional functioning are factors that are part of the definition of mental health. As I moved to middle school, maintained a small group of friends who were positive role models or me. Through the later years however, I was unable to connect with my peers. Some of them had different interests and some even went as far to abuse substances. This particular risk factor is delinquent peers. I never partook in these interests because never needed to turn to substance abuse to get through school and I wasn’t interested in the same things as everyone else was. I enjoyed learning and the middle school I attended fostered my cognitive functioning. Because I didn’t follow the norm, another risk factor was present in my life; peer rejection. Towards the end of middle school, I ad few friends whom I could trust and was quite shy. I was bullied because of my ethnicity and also because of the fact that I came from a less wealthy background than my peers. This in turn affected my self-esteem and is a large factor in a person’s mental health. Although my self-esteem around my peers was not great, I was quite confident in my cognitive and academic abilities. As given many opportunities for personal growth such as being put into a special advanced math program. This helped me lessen the impact of risk factors that I encountered in the peer and school domain. Community articulation also played a huge part in why my self-esteem was still positive. Was involved with extra-curricular outside of school, which allowed me to distance myself aw ay from the risk factors I encountered at school. I had another group of friends could depend on for being positive role models and to foster positive peer relationships. My parents continued to monitor me because they understood that I was going through a tough time with friends in middle school. Because of these factors, they asked me if I wanted to attend the high school in my neighborhood. By moving schools, this allowed me to completely start over and virtually eliminate the risk factors that came with attending this middle school. Early adolescence During high school, I was able to step out of my comfort zone and develop resilience to many risk factors because I had found new friends who fostered a positive school climate and positive peer relations. My friends in high school actually cared about school and would encourage me to do my best. They also got me involved in many extra-curricular at school. We connected on many different levels and I was able to enjoy life more without having the terrors that had in middle school and improve upon my social connections. The ability to enjoy life and social connections are two positive mental health components that are defined by the Canadian population Health Initiative (pig. 473). Towards the end of high school, my grandmother was diagnosed with mild depression after my grandfather committed suicide. Both of them were struggling with a mental illness. My entire family was unaware of the mental health condition that my grandfather was in after he was diagnosed with cancer. This put huge stress on my mothers mental lath as well as my own as care dearly for both my grandmother and my grandfather. Currently, grandmothers mental illness is another risk factor that is present in my life. My grandmother is incapable of taking care of herself due to her severe arthritis. My mother took on the administrative work to get her moved to a care facility but our entire family puts a lot of time and energy to see her. This has put stress on everyone including myself. She does not show many signs of improvement and still struggles With mild depression. Current When came to university, I moved out of my parents’ home and into a accidence. My apartment mates were my peers at the time. They were delinquent peers and I mostly kept to myself at home. I like to keep things quite neat and the state of our apartment was too much for me to handle. My apartment mates would come home late at night, which would often disrupt my sleep due to the high noise level. To offset the amount Of stress I experienced, I turned to community involvement. Got involved with Foot Patrol, Winter Carnival and the Chinese Student Association. This allowed me to distance myself from the risk factor because I would be spending less time t home. All the extra curricular involvement enhanced my self-esteem and self-efficacy and had the opportunity to develop myself as a person and grow. The friends met through community involvement had great future aspirations and would always encourage me to plan for my future. This is another protective factor. At the time, I was still unsure of what stream of business wanted to focus on. The uncertainty was a major stress factor in my life but I recently decided to pursue marketing. Next 5 Years will have student loans to pay off which is a significant stress. Also face he task to find a place of my own because I will be moving out. I’ll have to move to a different neighborhood and make new connections with the people around me as well as the peers that hope to meet when start working at a full-time job. My parents have started saving for their retirement and that puts enormous stress on my mental health because they will no longer be able to support me. This is a huge change as for most of my life as I was used to being cared for financially. To offset these stress, I will continue to participate as an active member in the community. This will help o strengthen my relationships with my peers and continue to provide me opportunities for growth. Community participation is a very important part of my life and I hope it will continue to be. It develops a person’s cognitive, social and emotional functionality, which in turn leads back to a positive mental health. The personal growth that I’ve seen in myself gives me a positive outlook on my mental health and life in general. In order to offset the stress that will encounter, I will maintain my current friendships and attempt to create new ones. Will also maintain the strong family legislations have developed over the past few years. How to cite Abnormal Psychology Assignment, Papers

Changes in Workforce and its Impact on Employee Free-Samples

Question: Discuss about the Changing Workforce Composition and its Impact of Employee. Answer: Introduction: Workforce is the very important part of the organization. This is because workforce of the organization supports all the functioning of the organization. Nature of organization affects the pattern in which the organization framed its policies and structure. This workforce has undergone many changes from inception to present (Cummings and Worley, 2014). This is because many external and internal forces affect the workforce of the organization. the external forces that affect the changes in the workforce is the change in demography in the place, involvement of female workers, economic conditions as well as education level of the people. The discussion below focuses on the changing workforce and its impact on the employee engagement. It also focuses on the strategies that the mangers of the organization need to implement in order to manage this changed workforce. Key issues: Workforce refers to the labor force that works in the firms in order to earn the wages and the salaries (James, McKechnie and Swanberg, 2011). The change in the labor market and the demand and labor supply are some of the forces that drive the changes in the workforce composition in the organizations. Australia is the country that has decreasing rate of unemployment. This is because of the rise in development of the companies as well as availability of the skilled resources for the organizations. In case of Australia, it has been observed that there are many jobs that are not present in todays organizations. This may be because of advancement in technology that has replaced the human work at the firms these days. It has also been observed that the ratio of employed people with respect to the population of the country has also been increased and this may be the reason of involvement of most of the female workers in the organizations these days (Macey, Schneider, Barbera and Young, 201 1). In todays era, most of the women are educated and thus wants to work in order to support their families economically. Changes for workplace engagement: If the comparison has been made between earlier workforce and recent workforce, it has been analyzed that the workforce of earlier times was stable enough to stick to one of the company for long time whereas; the workforce today shows exactly different approach of working. They find it difficult to stay for so long with the organizations they work with. Now a day, people work on contract basis and do part time jobs. This does not bound them with the organization for so long and thus they are ready to move to another organization where they find any better opportunity for them. Technological advancement is also a factor that is bringing change in the workforce composition (Sonenshein and Dholakia, 2012). Most of the employees especially the female ones work from home and thus remain detached from the organizations culture and structure. This acts as the obstacle for the employee engagement concept. This change in the workforce in recent times is affecting much organizations aspect suc h as the policies that motivate the employees and the employee engagement practices are very different from the strategies that were used in earlier times. Now, the question arises how the change in workforce affect the employee engagement in the firm. The change in nature of the workforce composition signifies the change in their needs and requirement patterns (Stone, 2013). This change affects the level of engagement of the employees. It has been observed that the young employees does not wants to stay in the same organization for long and thus does not get motivated by themselves to engage in the companys processes while the employees that are also have the commitment towards their organization and they themselves try to make efforts towards achievement of the organizational goals. Assessing these changes in the workforce, it can be predicted that the workforce in future will require more and more work life balance because of the increasing pressure and thus organizations need to implement the strategies that can retain the talent in the organization. This is because job hopping is the concept that has been developed and will enhance in the coming years. According to the concept, the employees of today's generation are the hunters who look for new jobs all the time (Bhasin, 2012). As and when they get the opportunity, they leave the current job to grab that opportunity. Most of the organizations these days implement many strategies that facilitates the employees with lot more benefits. This is the strategy of the organization to attract the talent. Workforce and managerial implication: There are various strategies that the mangers of recent times implement in order to enhance the employee engagement practices in the organization as there is an immense need to do the same. One of the strategies that can help the organization would be growth opportunities; this is because this is what the new generation workers or employees are looking for (Kapoor and Solomon, 2011). So, providing growth opportunities in the same organization will retain the employees for long time. Developing the environment of working in the teas help the employees to develop their professional as well as individual skills and thus provide a platform for the employees to develop (Harvey and Allard, 2015). These kinds of practices by the managers retain the employees in the organization and they will not try to switch their jobs. Conclusion: To conclude, it can be determined that various changes have been observed in the workforce of the organizations in recent times. These changes are related to the composition of the workforce. The involvement of females, part time jobs, concepts of work from home are some of the major change that have been analyzed to identify their impact on employee engagement practices. It has been identified that more employee engagement practices needs to be installed and implemented in the organization to manage such a dynamic workforce. This is because, the organization have to retain the talent with them for proper functioning of the firm (Ram and Prabhakar, 2011). Brining the stability in the todays workforce is the challenge for the managers of the firms and this has increased their efforts towards employee engagement practices. References: Bhasin, S., 2012. An appropriate change strategy for lean success.Management Decision,50(3), pp.439-458. Cummings, T.G. and Worley, C.G., 2014.Organization development and change. Cengage learning. Harvey, C.P. and Allard, M., 2015.Understanding and managing diversity. Pearson. James, J.B., McKechnie, S. and Swanberg, J., 2011. Predicting employee engagement in an age?diverse retail workforce.Journal of Organizational Behavior,32(2), pp.173-196. Kapoor, C. and Solomon, N., 2011. Understanding and managing generational differences in the workplace.Worldwide Hospitality and Tourism Themes,3(4), pp.308-318. Macey, W.H., Schneider, B., Barbera, K.M. and Young, S.A., 2011.Employee engagement: Tools for analysis, practice, and competitive advantage(Vol. 31). John Wiley Sons. Ram, P. and Prabhakar, G.V., 2011. The role of employee engagement in work-related outcomes.Interdisciplinary Journal of Research in Business,1(3), pp.47-61. Sonenshein, S. and Dholakia, U., 2012. Explaining employee engagement with strategic change implementation: A meaning-making approach.Organization Science,23(1), pp.1-23. Stone, R.J., 2013.Managing human resources. John Wiley and Sons.