Expert answer:Can you make comment below to the 2 person posted?Finance DiscussionAdvanced Time Value of MoneyAn advertised monthly lending rate of 0.9% is about 11% per year. This difference between an advertised rate and the annualized rate is based on finer TVM details that may be overlooked by borrowers. Discuss how you may have used TVM in a recent investment or loan decision and explain some of the TVM details that may have been involved in your transaction.From: Wayne Branigan posted Dec 9, 2017 10:30 PMHi all,Time Value Money is a concept based on the idea that money today is worth more today than in the future. Inflation can cause value of money to decrease over time. This is why I hate credit cards. The interest charged are ridiculous, especially department cards, like Best Buy. A lot of this cards carry a 18% APR. $5,000 purchase will cost $900 in interest for one year. Now you’re looking at $4,100 after 12 months. This is the case with a purchase I made. I decided to pay this balance off really quick because I refuse to give that much money away. They won’t me paying the minimum payment for the next 5 years or so. You end up paying double for the product and by the end of it, you item has depreciated.WayneFrom: Michael Hochkins posted Dec 9, 2017 10:23 PMHello Professor & Classmates,Last year I purchased my first car on my own, a Jeep Wrangler. I had to make a decision to either pay for the vehicle in cash or make payments over time and finance it through my bank by taking a loan out and paying interest on each car payment until it is paid off. I chose to pay for my new Jeep with cash. I had been saving up for this purchase so thankfully I was able to save money by not paying for interest. If I was not able to pay off my Jeep in cash up front then I would have to research a bank that would allow me to take out a loan with the lowest interest rate possible. That is the most important thing because nobody wants to pay more than they have to. These were TVM details I had to consider when purchasing my Jeep. Regards,Michael Hochkins
