This week covers present value, a foundational concept in Finance. In order to
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This week covers present value, a foundational concept in Finance. In order to understand and make sound investment decisions, a financial manager must be able to compare and contrast projects offering different cash flow streams. Applying time value of money theory provides this standard.
For this discussion board, research a bank, local credit union, or regional financial institution you may use or are aware of. Find two safe savings products they offer. The most likely products include money market, certificate of deposit (CD’s), or a savings account. Consider an investment period for each of these products greater than 2 years. For example, you could select a 3-year CD and a money market fund you hold for 5-years. Feel free to use Bank Rate for some of the best rates on these different products.
For this discussion board, answer the following questions: Identify the financial institution and how you heard of this company. Describe the two products that you would save with. You may want to identify the trade-off between the rate, access to funds, and time horizon.
Assuming $10,000 in each investment, what would the account be worth given the time horizon? provide the following variables:
Present Value (PV)
Time Horizon (N)
Future Value (FV)