Time Value of Money - This is the concept where you will know the potential value of money.

 kadalasan makikita ito sa mga investors, loan payment at mga nagpa-plan for their retirement.
 Mahalaga ang time Value of Money dahil dito nagkakaroon ng idea o information sa kalalabasan
ng pera.

So, the first step to analyze the time value is to set up a time line.

 Time like – Ito ay graphic diagram na ginagamit para maipakita yung nangyayari sa pera mo
within a given period.

Here is the sample of time line:

Let's say we have $100 for our present value that is on hand today. So when you say Present
Value (PV) ito yung amount ng pera ngayon. Yung 1, 2 & 3 ay yung period. Let's say na 3 years yan but
periods can also be quarters or months or even days. Its depends on the given problem. At 5% na yan ay
yung interest rate per year. Kaya ang hahanapin ay yung Future Value (Fv) o yung amount ng pera after
ng periods at nakuha na yung interest.

Compounding - kapag from present value to future value ang tawag doon ay compounding dahil ang
kinukuha ay yung final amount after maearn ung interest.

There are four methods to solve time value problems.

First is A step-by-step approach - dito ginagamit yung time line. So proceed tayo sa example kanina. So
$100 times 5% or 0.05 in decimal that is $5.25 kaya merong $5 interest during the first year. kaya $100 +
$5 is equal to $105.

For the second year meron kanang $105 times 5% ulit and that is $5.25 kaya ang interest for the second
year is $5.25. $105 + $5.25 = $110.25. Mas mataas na yung nakuha na interest during the 2nd year
compare sa first year's interest. Kaya ang tawag don ay compound interest kapag naka earn kana ng
interest sa interest last period ayon ay compound interest.

Huwag kayo malito between compounding and compound kasi compounding he earn mo lang yung
interest at final amount. So ayon ganon lang ulit process. Meron nang $140.25 times 5% ulit and that is
$5.51 at yon ang interest for the 3rd year. $110.25 + $5.57 is equal to $115.76. The total of the interest
is $15.76 kaya ang final amount ay $115.76.

Yung pangalawang methoday Formula Approach - Sa formula approach ay mas madali dahil may
formula na gagamitin para makuha ang future value (FV n = PV C1 + 1)n

Gamitin parin ung example kanina. So FV3 kasi yung N ay number of periods get PV or present value
yung $100 so ayon yung amount ngayon times 1.05 kase pinag-add na yung 1 at 0.05 na interest 5%
tapos 3 exponents ayon yung number of periods na 1.05 to the power of 3 is 1.157625 time 100 the
total is $115.76

Pangatlo ay ang financial calculation – Madali lang din to kaso mahirap ata mag hanap ng calcu na
merong ganitong keys. Meron akong nahanap na website na pwede maging reference para dito. So you
can also try it for better understanding.
So una yung PV or present value natin ay $100. Take note huwag niyo kakalimutan yung plus - minus
sign kasi dapat naka negative siya. So you must enter the 100, then press the +/- key to switch from
+100 to -100. If you enter -100 directly, 100 will be subtracted from the last number in the calculator.
Kaya mali yung makukuha niyong sagot.

Last method is spreadsheets

Dear Kimmy,

Happy Birthday, Happy Anniversary, Merry Christmas and

Happy New year! Thanks for being with me always. Thankyou for
letting me be vulnerable when I’m with you. You helped me a lot to
grow as a person. I hope I’m helping you too. I will always improve on
myself everyday so you may get the love and care the you really
deserve.
I know everything is a bit hard right know. Especially when it comes to
school and work. But I believe in you. And know that you’ll be able to
handle this since you have a dream and a goal. That’s one thing I admire
about you. Don’t give up. I know you can achieve it.
Lastly. I hope liked my gift. I’m not sure if you’ll still be into it but I
know that among the series this is one of your fav stories. Sorry If I
didn’t ask you what story you want. You might get the idea already.
I love you. Always remember that you are important and you are loved.
Don’t be so hard on yourself and if you need help with anything or want
to talk about something, always remember that I’m here with you.
Again, I love you my wifey always, everyday and forever. In any
Universe or Lifetime, I’ll always choose you.

Love, Ivan