Abstract:
The Time Value of Money is an important concept in Financial Management. The Time Value of Money includes the concepts of future value and discounted value or present value. In the present article, the basic notions are described and their applications in the field of investment are presented in the mathematical terms by using some useful theorems. Then, the applications of some well-known problems with the proof such as mortgage loan problem, investment in bond and an individ-ual who plans to retire in certain years who plan for investment for its future life. We also presented the application of calculus such as limit, derivative and integra-tion in financial management.
Machine summary:
[2] Vol. 4, Issue 2, (2019) Advances in mathematical finance and applications 2 Time Value of Money Time Value of Money (TVM) is an important concept in Financial Management [7,8].
For example, a cash flow stream of ₹ 100 at the end of each of Vol. 4, Issue 2, (2019) Advances in mathematical finance and applications [3] next five year at the rate of 10% can be represented on a time line as follows: 10.
Corollary: If there are compounding per year with nominal yearly interest rate , then the future value of ordinary annuity at time years is: )VIew the image of this page) Proof.
Corollary: If there are compounding per year with nominal yearly interest rate, then the future value of annuity due at time years is: )VIew the image of this page) Theorem 7.
, , Corollary: If there are compounding per year with nominal yearly interest rate, then the present, , value of annuity due at time years is:, , )VIew the image of this page) Application of Mathematics in Financial Management Theorem 8.
the money invested on 1st January 1975 be $512x Therefore, we are given that sum of all these deposits is equal to 2046 ⇒ +2 +4 +⋯ +512 =2046 [10] Vol. 4, Issue 2, (2019) Advances in mathematical finance and applications )VIew the image of this page) Numerical Example 2: If the loan is for 100000 to be paid back over 360 months at a nominal yearly interest of 9% com- pounded monthly.