Foundations and Applications of the Time Value of Money

by Pamela Peterson Drake, Frank J. Fabozzi

Comprehensive coverage of the time value of money In this book, authors Pamela Peterson Drake and Frank Fabozzi fully expand upon the type of time value of money (TVM) concepts usually presented as part of overviews given in other general finance books. Various TVM concepts and theories are discussed, with the authors offering many examples throughout each chapter that serve to reinforce the tools and techniques covered. Problems and detailed solutions-demonstrated using two different financial calculators, as well as Excel-are also provided at the end of each chapter, while glossary terms are provided in an appendix to familiarize you with basic terms. Understanding the time value of money is essential, and this reliable resource will help you gain a firm grasp of its many aspects and its real-world applications.

Genres: Finance

320 pages, Hardcover

First published January 1, 2009

About the author

Pamela Peterson Drake, PhD, CFA, is the J. Gray Ferguson Professor of Finance and Head of the Department of Finance and Business Law in the College of Business at James Madison University. Prior to joining James Madison, she was an associate dean and professor of finance at Florida Atlantic University and, previous to that, a professor at Florida State University.

Reviews

[Sjors · Rating 4 out of 5]

A comprehensive overview of the the time value of money, offering many worked-out calculations demonstrating how to tackle such questions as “How much money do I need to start saving each month from age 30 to accumulate a retirement fund of $2 million at age 70?”. Answer: about $1,400 per month, assuming average yearly compounding returns of 5% on your savings & investments. If you are only able to save $100 per month, you will still accumulate $150,000 by age 70. The key is: start early and be consistent.

While I was already quite familiar with the subject matter and the straightforward math involved in it, I do believe that this is a very valuable book for those who want to step through a few retirement scenarios themselves, or want to understand the mechanics of mortgages, or perform valuation calculations on business opportunities etc.

Four stars - would recommend.