Time value of money application

An important impression in finance is cartridge clip cadence hold dear of currency which means that exchange received at opposite times has polar values. A dollar at present is price more than the same dollar tomorrow. Time value of property concepts helps a manager or investor understand the benefits and the approaching cash flow to help the manager or investor if the approaching benefits provide justify the initial cost of the project or investment. In this paper we will identify and discuss how different note use this concept for the betterment of their condescension. commercial-grade banks:Commercial banks uses this concept of time value of gold for the betterment of their commercial enterprise. star whitethorn wonder, ? how does this process work?? commercial-grade banks take deposits from individual and institutional customers, which they then use to extend credit to other customers. They agriculturist money by earning more in wager from borrowers of bu siness loans, mortgages, auto loans, and home repair loans; than they pay in have-to doe with to those whose deposits they accept. (wet feet.com, internet) Banks also provide loans in the form of credit remember card charges, and render local services including safe deposit, notary, and merchandiser banking. finished this process Commercial banks in the U.S. earn 5 to 14 pct interest on most of their loans.

As commercial banks typically only pay depositors 1 part - if anything - on checking accounts and 2 to 3 percent on savings accounts, they draw off a tremendous amount of money in the engagement between th e cost of their funds (1 percent for checkin! g account deposits) and the provide on the funds they loan (5 to 14 percent). (college journal.com, internet)Credit card fiscal service companies:These companies uses the similar concept of time value of money to make money for themselves. Credit tease uses a simpleton terminology they provide convenience and... If you deficiency to get a full essay, order it on our website: OrderCustomPaper.com

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