Time Value of Money

Paper Summary:

This paper takes a look at the application of the time value of money (TVM) theory when planning for retirement. The paper reviews the case of Mr. and Mrs. Smith, taking note of their current financial situation. The paper discusses what steps need to be taken to prepare for their future and their retirement.

Outline:
Retirement Planning Case Study
Saving For College
Retirement Living
Discussion and Recommendations
Sensitivities
Alternative Investment Opportunities

From the Paper:

"Other types of investments, such as stocks, or mutual funds have high rates of return. However, they also carry a substantial amount of risk as well. One has to weigh the amount of risk involved with each type of transaction. In general, mutual funds are much less risky than single stock purchases. However, there are options, such as combining low risk investments with higher risk investments in an attempt to balance risk with return. The type of investment depends on the level of risk that the customer is comfortable with. "

Sample of Sources Used:

• Bankrate.com. 2006. CD Rates. Accessed September 17, 2006 fromhttp://www.bankrate.com/gookeyword/rate/deposits_home.asp?pop=nopop&ec_id=GOOG_ag_Ohio_CDs_ky_Exact_k_cd_rates.
• MoneyCafe.com (2006). Cost of Savings Index. Accessed September 17, 2006 from http://www.moneycafe.com/library/cosi.htm.
• Yahoo Finance (2006). Top Fund Performers. Accessed September 17, 2006 from http://biz.yahoo.com/p/tops/ma.html.!

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