Time Value of Money is a self-paced tutorial divided into the following segments: simple interest, compound interest, compound interest formula, future value tables, annuities, present value, present value of an annuity, intrayear compounding, annuities due, perpetuities, using a financial calculator, and additional resources (problem bank). Each tutorial begins with instruction and a demonstration of a concept followed by an example the learner is asked to solve. At the conclusion of each segment, learners can test their understanding by completing a practice exercise that is comprised of two or three problems. Time Value of Money tables have been included where applicable. Instructions along with illustrations for using Excel to solve time value of money is also provided.
Type of Material:
Tutorial
Recommended Uses:
The module could be used for self-paced instruction in an online course, supplemental instruction for self-study and review, supplementary material in a high school business course, adult education in finance, or as remedial material in a basic finance course.
Technical Requirements:
Internet browser, Adobe Acrobat Reader, Excel.
Identify Major Learning Goals:
As a result of completing this tutorial, students will understand and apply concepts associated with the time value of money in the following areas: simple interest, compound interest, future value, present value, ordinary annuities, annuities due and perpetuities. In addition, students will be able to: use a financial calculator or an Excel spreadsheet to solve time value of money problems, as well as time value of money tables to solve problems.
Target Student Population:
College students studying time value of money concepts in principles of accounting,
financial accounting, or finance classes. May also be suitable for high school.
Prerequisite Knowledge or Skills:
Basic algebra and a basic interest in the fundamentals of the time value of money is all that is required.
Content Quality
Rating:
Strengths:
The quality of content for this module is excellent. Time Value of Money is very professionally done. The amount of information included is clearly and succinctly worded yet completely sufficient to demonstrate each time value of money topic addressed. Information presented is both accurate and informed by scholarship progressing from the simple to complex. Definitions are very useful. The calculator is a very handy tool to use as a practice aid. The problems at the end of each section reinforce the tutorials. The test at the end of the section is a good review.
Concerns:
The concepts presented are very basic. In an era of hardward and software with instantaneous calculating, one wonders whether opening a new window using Adobe Acrobat Reader to list tables is efficient. The tables give the impressionn that we have technologically "punted." Why not use simple background calculations in Excel or another format?
Potential Effectiveness as a Teaching Tool
Rating:
Strengths:
The effectiveness as a teaching tool for this module is very, very good. Students can, at their own pace, learn how to solve time value of money problems using a variety of approaches (online calculator, financial calculator, Excel worksheet). Concepts are reinforced progressively continuously building on prior concepts. The tutorial takes the form: present information, illustrate concepts, provide practice. The fifteen-item problem bank is an excellent resource from which homework can be assigned. The module is fundamentally sound. Examples and test materials give ample practice material. Mini-tests show correct answers after a student attempts questions.
Concerns:
While learning objectives can be inferred from the Table of Contents provided, they have not been explicitly stated. The mini-test questions need better distractors. Students very likely will be able to guess the correct answers. The test material at the end of the module could include answers to allow students to check their final work. The financial calculator module seems somewhat specific to the type of financial calculator employed,
thus it loses some external validity.
Ease of Use for Both Students and Faculty
Rating:
Strengths:
Time Value of Money is excellent from a graphics design standpoint. Vertical scrolling is minimal to nonexistent. Users can move forward or backwards from frame to frame or return to the Table of Contents at any time. Key words are highlighted and linked to pop-up definitions. A built-in calculator can be used to determine the solution for every problem. Users enter data and the mathematical operation to be performed. Upon clicking submit, explanatory feedback is provided. Everything from the tutorial can be printed, including the time value of money tables. A link to Adobe Acrobat Reader is included in case a user needs to download the software. Color, font, and white space have been used most effectively to make each page visually appealing and engaging. Overall the ease of use and design quality of this module is outstanding.
Concerns:
None
Creative Commons:
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