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Time Value of Money
The time value of money serves as the foundation of finance. The fact that a dollar today is worth more than a dollar in the future is the basis for investments and business growth. The future value of a dollar is based on the present dollar amount, interest rate and time period involved. Financial calculators and tables can assist in computing the future and present values, which eases the pain of the mathematically challenged. Yield or rate of return can also be calculated.
One financial application of the time value of money is buying or selling a house mortgage note. Although normally handled by financial institutions, individuals can use this as an investment opportunity. The first step is having the note is calculated for present value. A Certified Mortgage Appraiser determines the current value of a mortgage note. The note is calculated by figuring out the present value using several factors including the interest rate, liquidity, collateral and......

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Approximate Word Count: 1239
Approximate Pages: 5 (250 words per double-spaced page)

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