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Understanding the Time Value of Money: A Key Concept in Finance

Discover the fundamental concept of the Time Value of Money (TVM) and its significance in personal finance. This activity involves completing a worksheet to illustrate how money grows over time and the importance of maximizing returns on savings. With hands-on exercises and discussions, participants will learn how the present value of money differs from its future value and gain insights into wise money management practices. Join us to enhance your financial literacy and make informed decisions about your savings.

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Understanding the Time Value of Money: A Key Concept in Finance

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  1. Your Financial FutureLevel 1 UK Edition September 2011

  2. Activity 6: What is the Time Value of Money? • The link between time, money, and how that money can grow is called the time value of money. • If you have £10 in your pocket, its present value, or what it is worth today, is just that - £10. Its future value is the amount it will grow to at some point in the future if you manage it wisely. Bank of America Merrill Lynch

  3. Activity 6: What is the Time Value of Money? • Complete the Time and Money worksheet. This should take approximately 15 minutes. You can work in pairs if you want. • I will ask for volunteers to discuss your answers. Bank of America Merrill Lynch

  4. Activity 6: What is the Time Value of Money? • Review: • Use examples to explain the time value of money. • Describe why it is important to get the best rate of return possible on your savings. ? Bank of America Merrill Lynch

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