This module from the McGraw-Hill/Irwin Finance Tutor Series is an interactive simulation that allows users to calculate and graph the present or future value of a series of amounts. It also allows users to view feedback in terms of corporate investment planning. Finally, a series of review question in the form of a multiple choice quiz have been included.
Type of Material:
In-Class, Lecture, Review.
Identify Major Learning Goals:
To better understand present value and future value calculations.
Target Student Population:
Introductory Financial Accounting or Finance courses
Prerequisite Knowledge or Skills:
Basic understanding of algebra
The module is clear and concise in demonstrating present value and future value concepts. It permits the user to solve either present value or future value problems by entering the rate of return (1-20%), time period in years (1-5), and investment amount ($100-$2,000). The simulation builds a graph and displays the results. When two scenarios are generated for comparison purposes, a View Feedback button provides investment insights and general comments. The simulation provides accurate information and summarizes concepts well. Users can also click a Questions button to activate a short multiple choice quiz that includes positive response and corrective response feedback.
The range of allowable values is somewhat limited as only integer numbers can be entered compared to a larger range of values consistent with time value of money tables typically found in textbooks covering this concept. Single sum calculations are also absent.
Potential Effectiveness as a Teaching Tool
This simulation is an excellent tool for supplementing a lecture by providing a dynamic illustration of both future and present value.
The module introduces the learning objective, reinforces concepts progressively, and demonstrates relationships between the concepts.
The simulation is a very efficient and effective teaching and learning tool. It focuses on demonstrating two very basic concepts and does it very, very, well.
The corporate investment planning feedback is a nice feature along with the interactive quizzes.
Prerequisite knowledge is not identified. Users need to know basic financial terms prior to using the simulation in order to understand the feedback.
An introduction to the topic of time value of money is not provided. While this isn't necessarily troublesome, instructors need to provide context rather than using the simulation for stand-alone instruction.
Instructors should also realize that the simulation does not explain how to calculate the present value interest factors, but rather shows the future or discounted value of the amount per year and then sums the individual annual amounts.
The number of questions included on each quiz is limited to three on future value and five on present value. They are static instead of being randomly generated from a bank of quiz items.
Ease of Use for Both Students and Faculty
The module is very easy to use. Instructions are clear and suggest data in order to two graphs for comparative purposes.
Users can edit, hide, and delete the charts they create.
The screens are professionally designed and impressive in terms of visual appeal.
Finally, the simulation is both engaging and visually interactive, one students will enjoy using.
The font size is a bit small and may be hard to read if displayed via a projection system.
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