10.1 Chapter Ten: Learning Outcomes

In this chapter, you will:

• Calculate Simple Future- and Present-Values both mathematically and with a simple calculator, and by using an Interests Rates Tables. 

• Apply the Three Commandments of the Time Value of Money (TVM). 

• Differentiate between simple interest and interest-on-interest. 

• Consider the curvilinear nature of compound interest and TVM. 

• Compare the relative volatilities of short-term versus long-term cash flows.