Learn how understanding the time value of money (TVM) can help you figure out loan payments, save for college and retirement, rent or buy a house, lease or purchase a car, and make long-term business decisions.
- Hi, I'm Jim Stice. I'm a professor of accounting at Brigham Young University. This is my brother, Kay. - I'm also a professor of accounting at Brigham Young University. - As accounting professors, we're constantly teaching our students about loan payments, interest rates, and the business cost of borrowing. - We have found this kind of information to be valuable in our personal lives, as well as in the lives of our family. For example, one of the things that attracted my wife Ramona to me, before we were married, was the fact that if she gave me an interest rate, and a hypothetical future monthly income, I could tell her how much we could afford to pay to buy a house.
- Whew! Well, I guess romance comes in many different shapes and sizes. I, myself, have found my knowledge of the workings of interest to be useful in evaluating car payment options, both for myself, and for my children. - In this course, we will explore the practical impact of interest rates on car payments, house payments, savings plans, and retirement plans. The consideration of interest rates falls under the general conceptual heading of the time value of money. - Now, before taking this time value of money course, you might consider taking our finance fundamentals course.
Among other things, that course introduces you to interest rates and investments. - With that said, we have designed this time value of money course to be self-contained, and we carefully explain any terminology that we use. - In short, this is an introductory course with no prior quantitative or mathematical knowledge necessary. - This is not a spectator course, so you probably want to have some sort of computing device at hand. - [Jim] A business calculator is fine, or a blank Excel spreadsheet. Just something you can use to do some interest rate calculations. - At some point in our lives, we all need to understand the impact of interest.
Let's learn about the time value of money.
Learn more about interest rates and investments in the Stices' Finance Fundamentals course.