Week 2 — Financial analysis and the time value of money

← Course map

This week you will

• Learn why a dollar today is worth more than a dollar later.
• Calculate future value with the formula and with Excel.
• See how compounding makes money grow faster over long periods.

1. Watch

• Future value and compounding — video at the bottom of the page.

2. Try

Open the concept page and do the “Try it” box. Then come back and try this company version: a firm keeps $1,000,000 of cash in a money-market fund at 4.5%.

How much more would the firm have after 10 years at 6% instead of 4.5%? Move the rate slider to find out.

3. Check yourself

Answer the “Check yourself” questions at the end of the concept page. Not graded — it tells you if you are ready for the homework.

4. Do in Moodle

1. Kahoot self-paced challenge for this week.
2. CFO Dossier page for this chapter.
3. Homework.

Due dates and points are in Moodle.