scholarly journals A Journey Through Time: From The Present Value To The Future Value And Back Or: Retirement Planning: A Comprehensible Application Of The Time Value Of Money Concept

2016 ◽  
Vol 9 (3) ◽  
pp. 137-143
Author(s):  
Carolin E. Schmidt
Keyword(s):  
Learning Experience ◽  
Real Life ◽  
Retirement Planning ◽  
Present Value ◽  
Personal Lives ◽  
Time Value Of Money ◽  
Time Value ◽  
Valuable Method ◽  
Future Value ◽  
Value Of Money

Real-life applications of financial concepts are a valuable method to get students engaged in financial topics. While especially non-finance majors often struggle to understand the importance of financial topics for their personal lives, applying these theories to real-life examples can significantly improve their learning experience and increase their understanding. This teaching case demonstrates how the time value of money concept can be applied to one’s private retirement planning. Because of its simple assumptions, the case is targeted at an audience with little financial knowledge and can be used in finance as well as in accounting classes.

scholarly journals Teaching Time Value Of Money Using An Excel Retirement Model

2012 ◽  
Vol 5 (6) ◽  
pp. 663-676
Author(s):  
Fernando Arellano ◽  
Liz Mulig ◽  
Susan Rhame
Keyword(s):  
Financial Literacy ◽  
Model Building ◽  
Business Students ◽  
Real Life ◽  
Retirement Planning ◽  
Traditional Teaching ◽  
Time Value Of Money ◽  
Time Value ◽  
Traditional Teaching Methods ◽  
Value Of Money

The time value of money (TVM) is required knowledge for all business students. It is traditionally taught in finance and accounting classes for use in various applications in the business curriculum. These concepts are also very useful in real life situations such as calculating the amount to save for retirement. This paper details a retirement model that can be built during class to teach TVM. While traditional teaching methods give small pieces of the TVM picture, then exercises to reinforce that partial knowledge, this model incorporates many TVM techniques into one Excel modeling exercise. The model incorporates both TVM functions that are included in Excel and other formulas that must be entered into Excel by the student modeler. Unlike some other articles that focus on how much should be saved annually assuming a constant salary, this exercise focuses on a percentage of income to be saved. The model also addresses an assumed growth factor in the salary and the issue of inflation. This modeling tool is presented to adults in graduate level classes, so it incorporates the fact that they might already have some savings coming into this retirement planning exercise. This method of teaching TVM has several objectives. Primarily, the exercise contributes to the learning of TVM concepts and techniques. It also shows how the equations modeled here can be used to solve retirement planning questions, while contributing to the personal financial literacy of students, and improving model building skills in Excel.

Nilai Waktu Dari Uang Dalam Perspektif Ekonomi Islam

2016 ◽  
Vol 1 (1) ◽  
pp. 71-84
Author(s):  
Misbahul Khoir
Keyword(s):  
Net Present Value ◽  
Average Rate ◽  
Rate Of Return ◽  
Value Of Time ◽  
Present Value ◽  
Time Value Of Money ◽  
Time Value ◽  
The Future ◽  
Current Value ◽  
Value Of Money

The time value of money is associated with the current value and future value because the money received now is more worth than the money received in the future. However, is the concept of time value of money is appropriate and justified by the Shari'ah? The time value of money is a concept that says that the money of the one rupiah that can be received today is more worth than one rupiah which will be received in the future time. The concept of time value of money is needed by financial managers in making decision when will invest in an asset and determine the source of loan funds that will be chosen. Methods for the time value of money pervade; a) the method of average rate of return. This method measures the level of profit gained by an investment. The disadvantage of this method is ignoring the time value of money; b) the payback period method. The method measures how fast the investment return is, the sooner the better; c) method of net present value (NPV). This method calculates quarrel between the current value of investment and the present value of net cash receipts in the future and calculates quarrel between the present value of cash outflow (investment) and cash inflow (income) per year; d) profitability index method (PI). This method calculates ratio between the present value of net cash receipts in the future and the present value of the investment; and e) the methods of internal rate of return (IRR).  If IRR > saving or profit required → decent. Islam views money as a flow concept. Money must rotate in an economy and may not be idle for too long time. Moreover, it lets for years. Islam does not recognize the method of time value of money because this method adds value to money solely with increasing time and not effort. Islam actually knows the money value of time; that is the time has economic value as well as the money value of money. Imam Nawawi provides definition related to value addition for money based solely on the value of time is the category of riba.

Der Weg zur modernen Investitionsrechnung

2010 ◽  
Vol 51 (1) ◽  
pp. 22-28 ◽  
Author(s):  
Stefan Behringer
Keyword(s):  
Net Present Value ◽  
Investment Decision ◽  
17Th Century ◽  
Separation Theorem ◽  
Present Value ◽  
Time Value Of Money ◽  
Time Value ◽  
Investment Appraisal ◽  
Value Of Money ◽  
The Way

Seitdem der Mensch wirtschaftet, triff t er Entscheidungen über Investitionen. Heute hat er dazu ein ausgereiftes Instrumentarium: Investitionen werden mit dem Kapitalwertkriterium in verschiedenen Szenarien, die mit ihren Wahrscheinlichkeiten gewichtet werden, auf Vorteilhaftigkeit geprüft. Der Weg dahin war lang: Die Zeit muss durch den Zins berücksichtigt werden. Allerdings war das kanonische Zinsverbot ein Hindernis auf dem Weg zum Kapitalwertkriterium. Erst Leibniz konnte den Weg frei machen, indem er eine logische Ableitung für die Barwertrechnung vorlegte. Um die Risiken der Investition angemessen zu berücksichtigen, braucht man Wahrscheinlichkeiten. Die französischen Philosophen Fermat und Pascal haben in einem Briefwechsel jeweils eine Lösung entwickelt, die heute in der Szenariotechnik Verwendung fi ndet. Damit die Investitionsentscheidung isoliert getroff en werden kann, bedarf es als letztem Element eines Separationstheorems, welches Irving Fisher Anfang des 20. Jahrhundert entwickelte. Today the Net Present Value rule is widely used in different scenarios, that are weighted with likelihoods to evaluate whether an investment is advantageous or not. The way to that rule has a long history, since investments are done since mankind works together in economies. Interest is needed to account for the time value of money. The canonical ban on interest was an obstacle for the development of the net present value rule, which was resolved only in an essay from Leibniz in the 17th century. The likelihoods were developed by the French philosophers Pascal and Fermat also in the 17th century. As last element of modern investment appraisal Irving Fisher developed the separation theorem, which allows making an investment decision isolated from the surroundings. Keywords: der weg zur modernen investitionsrechnung

Rate Regulation, Competition, and Loss Reserve Discounting by Property-Casualty Insurers

2000 ◽  
Vol 75 (1) ◽  
pp. 115-138 ◽  
Author(s):  
Karen K. Nelson
Keyword(s):  
Discount Rate ◽  
Present Value ◽  
Time Value Of Money ◽  
Rate Regulation ◽  
Insurance Premiums ◽  
Loss Reserve ◽  
Time Value ◽  
Value Of Money ◽  
Property Casualty

This study examines whether the reported loss reserves of property-casualty insurers contain an implicit discount for the time value of money. Reporting the present value of loss reserves enables insurers to justify the competitive level of insurance premiums to regulators. The evidence indicates that there is a positive and significant discount rate implicit in the relation between reported loss reserves and expected future claim payments. Moreover, insurers subject to relatively stringent rate regulation discount to a greater extent than do other insurers. The results also suggest that implicit discounting is distinct from solvency and tax motives to exercise discretion over the loss reserve.

scholarly journals Analisis Kelayakan Investasi Pada Budidaya Karamba Jala Apung (KJA) Ikan Kerapu Di Kepulauan Karimunjawa Kabupaten Jepara

2017 ◽  
Vol 6 (2) ◽  
pp. 94 ◽  
Author(s):  
Suryono Suryono ◽  
Ria Azizah ◽  
Edi Wibowo Kushartono ◽  
Raden Ario ◽  
Gentur Handoyo
Keyword(s):  
Net Present Value ◽  
Financial Analysis ◽  
Present Value ◽  
Time Value Of Money ◽  
Discount Factors ◽  
Time Value ◽  
Investment Plan ◽  
Investment Opportunities ◽  
Value Of Money ◽  
High Chance

Kajian Investasi budidaya ikan kerapu di Karimunjawa adalah salah satu usaha guna menumbuhkan promosi investasi di wilayah studi. Kajian ini akan membuat peluang investasi menjadi lebih fokus dan tajam baik dari segi sektor maupun lokasinya, sehingga akan memudahkan investor guna merealisasikan rencana bisnisnya. Studi ini akan memberikan detail informasi kepada investor tentang peluang bisnis pada budidaya ikan kerapu yang sangat layak dilakukan sehingga dapat meningkatkan pertumbuhan ekonomi masyarakat pesisir dan wilayah kabupaten Jepara pada umumnya. Metode yang digunakan adalah metode survei. Peluang Investasi dianalisa secara deskriptif. Hasil kajian menunjukan bahwa berdasakan potensi alam, fasilitas infrastruktur produksi, nilai ekonomi serta aspek financial maka kelayakan investasi adalah sangat prospektif dan berpeluang untuk sukses. Analisis financial menunjukan bahwa investasi pada budidaya ikan kerapu di Karimunjawa adalah sangat layak untukdirealisasikan bagi investor. Budidaya ikan kerapu Tikus (Cromileptis altivelis)adalah paling prospektif, dimana nilai Net Present Value (NPV)> 0,yaitu  1,772,764,729,  dan  Profitability Index  (PI) lebih besar dari  1, yaitu 5,543291036.  Payback Periodadalah  2.82 tahun, jika tidak mempertimbangkan nilai uang (Discount Factors) dan 3.65 tahun  jika mempertimbangkan nilai uang. Sedangkan untuk budidaya ikan kerapu bebek(Ephinephelus fuscoguttatus), Net Present Value (NPV)> 0 yaitu  69,938,924, - dan Profitability Index (PI) lebih besar dari 1, yaitu 1,20558783.  (Pay Back Period) adalah  4,13tahun apabila tidak mempertimbangkan nilai uang (Discount Factor), sedangkan apabila mempertimbangkan nilai uang maka menjadi  and 4.64 tahun. Dari analisis yang dilakukan, maka dapat disimpulkan bahwa meskipun kedua spesies ikan kerapu layak investasi, tetapi ikan kerapu tikuspaling layak investasi, sedangkan ikan kerapu macansebagai produk sampingan investasi, yaitu dengan memanfaatkan sisa pakan yang tidak digunakan dalam budidaya ikan kerapu tikus, sehingga hasilnya akan dapat maksimal. Keseluruhan aspek yang dikaji menunjukan bahwa budiddaya ikan kerapu di Kepulauan Karimunjawa adalah layak investasi. The study of feasibility floating cage culture of grouper fish investment in Karimunjawa is one of the efforts for investment promotion in the studied region. This study will make the investment opportunities become more focus and sharp, both sectoral and location, so it will be easier for investors to execute their investment interest. The purpose of this study, is to provide initial information for investors about business opportunities of grouper fish farming as a very feasible investment opportunities so that can boost the economy of the region and the society of Jepara Regency. The method used in this study was survey  method, descriptive analysiswas conducted to see a of investment opportunities. Based on potential natural resources, location, infrastructure facilities, production, economy value, and financial aspect, the  results of study concluded  that the overall investment is highly prospective and has a fairly high chance to success. The financial analysis showed that investment in grouper fish cultivation in jepara regency is very feasible as a business investment for the investors. Humpback or Polka dot grouper (Cromileptis altivelis) culture is highly prospective and has a fairly high chance. This can be seen from the Net Present Value (NPV) > 0 is equal to 1,772,764,729,  and Profitability Index  (PI) value greater than 1, which is 5,543291036.  While the longer the period the funds invested will return (Payback Period) is 2.82 years if the without considering the time value of money (Discount Factors) and 3.65 years when considering the time value of money. Whereas,  for Brown marbled grouper (Ephinephelus fuscoguttatus), the Net Present Value (NPV) > 0 is equal to  69,938,924, - and Profitability Index (PI) greater than 1, which is 1,20558783. While the longer  period the funds invested will return (Pay Back Period) are 4,13 year if without considering the time value of money (Discount Factors) and 4.64 years when considering the time value of money. From the analysis it can be concluded that all these choices on the investment plan is feasible to run and prospective advantageous. While the best option is an investment plan on investments Humback or Polka Dot grouper (Cromileptis altivelis) cultivation, Brown marbled grouper (Ephinephelus fuscoguttatus) culture whereas it is only a sideline activity and only utilize food wastes are left, so the whole will be able to deliver optimal results in grouper culture.All examined aspects of Grouper cultivation in karimunjawa  gave results that investment activity  is able to be executed. The financial analysis shows that investment in grouper fish cultivation in jepara regency is very feasible to be a business investment for the investors.

scholarly journals PERENCANAAN KEUANGAN DANA PENSIUN MELALUI METODE TIME VALUE OF MONEY DENGAN MENGGUNAKAN KALKULATOR FINANSIAL

2021 ◽  
Vol 1 (1) ◽  
pp. 47
Author(s):  
Eka Desy Purnama ◽  
Diana Frederica ◽  
Gidion Adirinekso ◽  
Deni Iskandar ◽  
Subagyo Subagyo
Keyword(s):  
Time Value Of Money ◽  
Time Value ◽  
Future Value ◽  
Value Of Money

<p><em>Tujuan kegiatan ini adalah (1) untuk memberikan wawasan pentingnya perencanan keuangan sejak dini untuk persiapan masa pensiun kepada masyarakat, khususnya kepada jemaat GKI Bogor Baru. Fokusnya adalah beberapa alternatif investasi keuangan yang dapat dilakukan sesuai dengan profile risiko. (2) memberikan praktek perhitungan future value dana pensiun yang harus disediakan pada masa pensiun nanti, dengan memasukkan time value of money melalui aplikasi kalkulator finansial. </em><em>Metode yang digunakan adalah penyuluhan dan pelatihan melalui presentasi materi oleh tim pengabdian kepada masyarakat, diskusi dengan peserta dan dipandu oleh moderator melalui aplikasi zoom. Umpan balik pelaksanaan kegiatan ini dilakukan dengan pengisian kuesioner melalui google form. Hasil kegiatan ini menunjukkan bahwa (1) melalui pelaksanaan kegiatan ini, peserta telah memahami perencanaan keuangan untuk masa pensiun dan memahani beberapa alternatif investasi keuangan sesuai dengan profile risiko masing-masing; (2) peserta mampu menghitung kebutuhan alokasi dana pensiun masa depan melalui penghitungan future value menggunakan aplikasi kalkulator finansial.</em></p>

scholarly journals Nilai Waktu Dari Uang Dalam Perspektif Ekonomi Islam

2016 ◽  
Vol 1 (1) ◽  
Author(s):  
Misbahul Khoir
Keyword(s):  
Net Present Value ◽  
Average Rate ◽  
Rate Of Return ◽  
Value Of Time ◽  
Present Value ◽  
Time Value Of Money ◽  
Time Value ◽  
The Future ◽  
Current Value ◽  
Value Of Money

The time value of money is associated with the current value and future value because the money received now is more worth than the money received in the future. However, is the concept of time value of money is appropriate and justified by the Shari'ah? The time value of money is a concept that says that the money of the one rupiah that can be received today is more worth than one rupiah which will be received in the future time. The concept of time value of money is needed by financial managers in making decision when will invest in an asset and determine the source of loan funds that will be chosen. Methods for the time value of money pervade; a) the method of average rate of return. This method measures the level of profit gained by an investment. The disadvantage of this method is ignoring the time value of money; b) the payback period method. The method measures how fast the investment return is, the sooner the better; c) method of net present value (NPV). This method calculates quarrel between the current value of investment and the present value of net cash receipts in the future and calculates quarrel between the present value of cash outflow (investment) and cash inflow (income) per year; d) profitability index method (PI). This method calculates ratio between the present value of net cash receipts in the future and the present value of the investment; and e) the methods of internal rate of return (IRR).  If IRR > saving or profit required → decent. Islam views money as a flow concept. Money must rotate in an economy and may not be idle for too long time. Moreover, it lets for years. Islam does not recognize the method of time value of money because this method adds value to money solely with increasing time and not effort. Islam actually knows the money value of time; that is the time has economic value as well as the money value of money. Imam Nawawi provides definition related to value addition for money based solely on the value of time is the category of riba. Keywords: Time value of money, Islamic economics

scholarly journals Computing Bond Values to Teach Time Value of Money Principles

2015 ◽  
Vol 1 (2) ◽  
pp. 64
Author(s):  
Carl B. McGowan ◽  
Donald T. Joyner
Keyword(s):  
Single Bond ◽  
Present Value ◽  
Bond Issue ◽  
Time Value Of Money ◽  
Time Value ◽  
Bond Valuation ◽  
Lump Sum ◽  
Value Of Money

The objective of this paper is to demonstrate how to use bond valuation to teach students how to use a financial calculator. In this paper, a single bond issuance is examined using three different yields to maturity (i.e. market rates). The present values of a $1000 bond issue, valued with five years to maturity and a ten percent coupon rate, are determined using three different yields to maturity: 8% (which would result in a premium), 10% (which would result in neither a discount nor a premium), and 12% (which would result in a discount). The present value of the bond is determined by calculating the present values of both the coupon payment stream (an annuity) and the maturity value (present value of a lump sum) given three different situations. All three values are determined for each year as the time to maturity decreases. A discount (premium) from a change in the YTM is reduced each year until maturity. The results are shown in tables and graphed in Figure 2.

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