Practice Concept Of Time Value Of Money (24.1) - Time Value of Money - Management 1 (Organizational Behaviour/Finance & Accounting)

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9 questions

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6 sample questions

Question 1.
Define Time Value of Money?
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Think about earning potential and inflation.
Question 2.
What does inflation do to purchasing power?
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Consider how prices change over time.
3Question 3.
What does the concept of TVM suggest?
- Money today is worthless
- Money today is more valuable than future money
- Money loses value immediately
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Think about earning interest.
4Question 4.
True or False: Risk increases the value of future money.
- True
- False
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Consider how future uncertainty affects value.
Question 5.
You have ₹8,000 today. If you invest this at an annual interest rate of 7% compounded annually, what will it amount to in 4 years?
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Use the FV formula for compound interest.
Question 6.
If you desire to have ₹20,000 in 3 years, what is the present value you need to invest today at an interest rate of 5%?
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Consider the PV formula to find how much to invest now.

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