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Time Value of Money and Inflation

Time Value of Money and Inflation. By: Max Rosenthal. Definitions. The Time Value of Money is the value of money figuring in a given amount of interest earned over a given amount of time .

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Time Value of Money and Inflation

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  1. Time Value of Money and Inflation By: Max Rosenthal

  2. Definitions • The Time Value of Money is the value of money figuring in a given amount of interest earned over a given amount of time. • Inflation is a rise in the general level of prices of goods and services in an economy over a period of time.

  3. The 1950s to TodayITEM: Men's All Wool Suits • The item cost $28.90 in 1950. • The item costs $379.00 today • It has gone up $350.10 • That is a percent increase of 1211% • So the inflation is 1211%

  4. The 1950s to TodayITEM: Ritz Crackers • The item cost $0.32 in 1950. • The item costs $2.99 today • It has gone up $2.67 • That is a percent increase of 834% • So the inflation is 834%

  5. The 1950s to TodayITEM: Mechanical Adding Machine • The item cost $3.98 in 1950. • The item costs $5500 today • It has gone up $5496.02 • That is a percent increase of 138090% • So the inflation is 138090%

  6. The 1990s to TodayITEM: Leather Bomber Jacket • The item cost $99.99 in 1990. • The item costs $160.00 today • It has gone up $60.01 • That is a percent increase of 6001% • So the inflation is 6001%

  7. The 1990s to TodayITEM: Super Nintendo • The item cost $159.00 in 1990. • The item costs $119.97 today • It has gone up $-39.03 • That is a percent increase of -24% • So the inflation is -24%

  8. The 1990s to TodayITEM: Snowboard • The item cost $199.00 in 1990. • The item costs $59.00 today • It has gone up $-140.00 • That is a percent increase of -70% • So the inflation is -70%

  9. Questions: • Calculating inflation over the past 60 years helps us to understand the prices in the past decades and we have to pay so much more now. • Why is it important that people get raises? To keep up with the increase in prices • If you get a 2% raise every year, will you be able to keep up with inflation? Why or why not? No because the inflation goes up more than that

  10. Conclusion: What I have learned(You must use the terms Time Value of Money and Inflation in your paragraph) • Over the past 60 years I’ve learned that the time value of money is the value of money figuring in a given amount of interest earned over a given amount of time. Inflation is a rise in the general level of prices of goods and services in an economy over a period of time. Some prices increase a little and a lot.

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