Benchmarking

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Issue:

Business

 

Written by:

Amanda J

 

Date added:

October 14, 2011

 

Level:

University

 

Grade:

A

 

No of pages / words:

5 / 1314

 

Was viewed:

6030 times

 

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Essay content:

For example, assuming a 5% interest rate, $100 invested today will be worth $105 in one year ($100 multiplied by 1.05). Conversely, $100 received one year from now is only worth $95.24 today ($100 divided by 1.05), assuming a 5% interest rate. Relationship determined by the mathematics of Compound Interest between the value of a sum of money at one point in time and its value at another point in time...
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Time value of money can be illustrated by the fact that a dollar received today is worth more than a dollar received a year from now because today's dollar can be invested and earn interest as the year elapses. Implicit in any consideration of time value of money are the rate of interest and the period of compounding...
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