Time Value of Money

Xingyun Peng

Chapter 3 in Financial Theory:Perspectives from China, 2015, pp 49-70 from World Scientific Publishing Co. Pte. Ltd.

Abstract: When you deposit a sum of money in the bank, how much interest can you expect in the future? Likewise, suppose you take out a loan to buy a house or a car, how much should you pay off per month? Say you wanted to start saving for retirement, how much should you save each month? After you retire, how much can you expect to receive each month? Almost everyone will run into these kinds of questions. To answer these questions, you must first understand the time value of money. When it comes to finance, the time value of money is one of the most fundamental concepts. This chapter will provide a comprehensive introduction to the time value of money and its calculation. From there, we will discuss the effects of inflation and interest taxes on savings plans.

Keywords: Monetary Economics; Financial Markets; Monetary Policy; Financial System; Financial Development (search for similar items in EconPapers)
Date: 2015
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