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Essay

Time Value of Money

Essay specific features

 

Issue:

Business

 

Written by:

Natalia E

 

Date added:

July 7, 2016

 

Level:

University

 

Grade:

A

 

No of pages / words:

4 / 1039

 

Was viewed:

3867 times

 

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Essay content:

Interest is the cost of borrowing money. An interest rate is the cost stated as a percent of the amount borrowed per a period of time, usually one year. The current market rates are composed of three items. The Real Rate of Interest is what compensates lenders for postponing their own spending during the term of the loan...
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An Inflation Premium is added to offset the possibility that inflation may eat into the value of the money during the term of the loan. In addition, various Risk Premiums are added to compensate the lender for risky loans such as unsecured loans made to borrowers with questionable credit ratings or loans that the lender may not be able to easily resell...
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General issues of this essay:
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