Time Value of Money
Cost Analysis and Engineering Economy
Single cash flow analysis (5 questions + 1 video)
Suppose you open a new savings account with an initial deposit of $100. The account pays 2% interest each year. If you do nothing:
Mathematical proof of above results =>
(Review video after attempting above questions)
Uniform cash flow analysis (7 questions + 2 videos)
Suppose you deposit $100 into a savings account at the end of each year for three years. The bank pays an interest of 2% each year.
Loan payments (5 questions + 1 video)
Consider an annual payment of $21,215.84 over the next five years, with the first payment occurring one year from now. Suppose you are able to get interest of 2% per year on your savings.
Mathematical proof of above results =>
(Review video after attempting above questions)
General cash flow analysis (4 questions)
A father plans to save for his child’s university studies. In particular, he hopes to have $20,000 each year for four years 18 years from now. How much should he have now assuming that he gets 4% interest each year? We illustrate three approaches to solving this problem.
Increasing cash flows (2 videos)
In the videos below, we will derive the time value of money formulas for cash flows with arithmetic and geometric growth.
A note of thanks to Lucia Tara Stockmann for the development of this online class material.