Alternative Perspectives on Teaching the Time Value of Money

Résumé fourni par la source

The time value of money is a foundational concept generally introduced in the first junior-level finance course at most U.S. business schools. Bond pricing and amortized loans are commonly presented as real-world applications of present value calculations. This paper offers alternative pedagogical approaches to these topics by demonstrating that both future bond prices and remaining loan balances can also be derived using future value methods. By broadening the analytical framework, these alternative perspectives should deepen students’ conceptual understanding of the time value of money and better prepare them to make informed financial decisions in both professional and personal contexts.