Financial and Managerial Accounting, 9th Edition
B-1
APPENDIX B
TIME VALUE OF MONEY
Related Assignment Materials
Student Learning Objectives
Quick Studies*
Exercises*
Conceptual objectives:
C1. Describe the earning of interest
and the concepts of present and
future values.
B-1
B-11, B-19
Procedural objectives:
P1. Apply present value concepts
to a single amount by using
interest tables.
B-2, B-3, B-4
B-1, B-2, B-12, B-13, B-18, B-19
P2. Apply future value concepts to
a single amount by using
P3. Apply present value concepts
to an annuity by using interest
tables.
B-6
B-7, B-8, B-9, B-10, B-11, B-12, B-13,
Financial and Managerial Accounting, 9th Edition
Additional Information on Related Assignment Material
See Chapter 1 of the Instructor’s Resource Manual for more information on materials for this text
available in Connect.
Connect
Available on the instructor’s course-specific website, Connect repeats all numerical Quick Studies, all
Prebuilt Assignments and Turnkey courses are available.
The Connect Orientation Videos provide an introduction for your students for using Connect to complete
assignments to help get your students up and running in the system. There are videos covering:
• End-of-Chapter Assignments
Need-to-Know Videos
LO
Need–to-Know
Title
Time
P1
B-1
Present Value of a Single Amount
1:18
P2
B-2
Future Value of a Single Amount
2:00
P3
B-3
Present Value of an Annuity
1:32
Concept Overview Videos
LO
Title
Time
C1
Describe the earning of interest and the concepts of present and future
values.
Present and Future Value Concepts
0:56
P1
Apply present value concepts to a single amount by using interest tables.
Present Value of 1: Determine Present Value
1:37
Present Value of 1: Determine Number of Periods
1:10
Present Value of 1: Determine Interest Rate
1:15
P2
1:44
1:14
Future Value of 1: Determine Interest Rate
1:25
P3
Apply present value concepts to an annuity by using interest tables.
Present Value of an Annuity
0:39
1:16
P4
0:34
1:20
Financial and Managerial Accounting, 9th Edition
B-3
Appendix Outline
I. Present and Future Value Concepts
A. As time passes, the values of our assets and liabilities change.
II. Present Value of a Single Amount
A. The present value of a single amount received at a future date is the amount that can be
III. Future Value of a Single Amount
A. The future value of a single amount invested at a specified rate of interest is the
IV. Present Value of an Annuity
A. An ordinary annuity is defined as equal end-of-period payments at equal intervals.
V. Future Value of an Annuity
A. The future value of an annuity invested at a specified rate of interest is the amount that
would accumulate by the date of the final payment.
Financial and Managerial Accounting, 9th Edition
B-4
Appendix B Alternate Demonstration Problem
Sarah Blue has the three options:
1. Receiving $1,000 per year for the next 10 years
Financial and Managerial Accounting, 9th Edition
Appendix B Solution: Alternate Demonstration Problem
The present value of $1,000 received annually for 10 years discounted at
10% equals $6,145.