FIN 3301, Financial Management 1
3.1 Calculate the annual payment on a loan using the present value of an annuity. 3.2 Use discounting to determine the present value of an annuity. 3.3 Calculate the future value of an annuity and periodic annuity payments.
6. Evaluate stock and bond valuation.
6.1 Determine the present value of a bond. Required Unit Resources Chapter 9: Time Value of Money Chapter 10: Bonds and Stocks: Characteristics and Valuations Unit Lesson In this unit, we will study two important areas of finance: the time value of money which was introduced in Unit I and bonds. We will examine the time value of money formulas for present value and future value calculations. Further, we will learn how the discount rate and time periods factor into the calculations. By the end of this unit, you will no longer wonder how much to save each year for retirement. You will learn practical ways of handling money and planning for the future. Money is an important part of functioning in society as it provides citizens with the means to purchase goods and services such as housing, food, and clothing. Money, however, does not retain the same value over the course of time, fluctuating with inflation and other factors in the economy. Moreover, bonds are also commonly used in the American economic system, often with a goal of earning interest in the future. Bonds are also subject to fluctuations in value, with time playing a large role in the fluctuations experienced. It is therefore crucial that individuals understand the time value of money and bonds, in addition to bond valuation, dividends and stock repurchases, compounding and discounting, and how time value applies to everyday life.
UNIT IV STUDY GUIDE Time Value of Money and Bonds
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