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Investing and Finance: The Time Value of Money

Audience

Managers, prospective managers, and other employees seeking advanced competency in the area of accounting

Prerequisites

An understanding of primary accounting concepts and methods

Course Aim

To introduce learners to the concepts of risk and return and the time value of money

Learning Objectives

Describe the difference between return on investment and return of investment. Discuss risk in an investment context. Explain the risk-return relationship. Distinguish between simple interest and compound interest. Explain the concept of present versus future value of a dollar. Calculate unknown rates or time periods. Identify the present and future values of annuities. Solve annuity problems.

Topics Covered

Risk and Return - The concept of return - The investment risk - The risk-return relationship Lump Sum Amounts - Simple and compound interest - The value of a dollar - Calculating unknowns - Hands-on: Calculating future values Annuities - Future and present value of annuities - Annuity problems