Demonstrate your understanding of the time value of money.
In your role as a financial advisor at Eagle Consulting, you will be meeting a potential customer, Keith Jones. Mr. Jones customer is 35 years old and married with two children, and he would like your help in planning a long-term investment strategy with the $100,000 he has to invest. In advance of your meeting, you decide to create a PowerPoint presentation that will educate Mr. Jones on the underpinnings of the time value of money. In doing so, your goal is to help your client understand the basic construct that a dollar today is more valuable than a dollar received tomorrow.
To complete this assignment, do the following:
1. Refer to the Eagle Consulting Info Sheet you downloaded for the previous course project piece
2. Develop a 6-screen PowerPoint presentation with accompanying lecture notes that:
a. Explains the concept of the time value of money
b. Provides examples of how time value of money calculations are determined
The presentation should include the following slides and accompanying lecture notes. The slide content should be brief and include supporting images or diagrams where appropriate. Use the Notes area beneath each slide to put the accompanying lecture notes for the slide.
Slide: Content
1 Title Slide
2. Slide Content: Main ideas of the time value of money min word limit of answer of qusetion is 750 words
a. Provide an explanation/definition of the time value of money.
b. Explain why understanding the time value of money is important to investors.
c. Explain the risk for investors in not understanding the time value of money.
3. Slide Content: Step-by-step example of a present value calculation using numbers
a. Explain the present value formula.b. Explain how changing the variables in the formula will affect the investment outcome.
4. Slide Content: Step-by-step example of a future value calculation using numbers
a. Explain the future value formula.
b. Explain how changing the variables in the formula will affect the investment outcome.
5. Slide Content: Identify impacts of compounding on the calculation of present value and future value
a. Provide examples of how compounding impacts both the present value and future value of investments.
6. Slide Content: Summarize the main points of the time value of money concepts.
a. Explain why these concepts are critical to an investor.