discussion

Provide your thoughts on the impact on starting to save early. How might this influence your future business decisions? 

Calculating the present value for money can help an organization determine whether or not the value of the money will be worth either the same value or more in the future as time goes by. Having these calculations also will give an idea of what percentage of the return will be as the years continue to pass. Overall, the company would like to see gains in their profits versus losses. One example that stands out to me would be when people that purchase vehicles. If the purchase value of the vehicle was at $25,000, this amount can be paid over an extended amount of time after taxes or in one lump sum. The present value vehicle is worth more than it would as the years progress. The future value of the vehicle would depreciate overtime at the rate of 7.3%. Looking at the vehicle value now, the value of the vehicle would reduce over by 7.3% overtime which means that the end of the term, it would have depreciate by over 25% by the end of the terms. This also means that the value of the vehicle would be worth less than what the selling price was and would be better to purchase the vehicle by paying one lump sum versus paying it over a course of 72 months with an interest rate of 5-10% overtime.