How inflation relates to the time value of money

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Let's say that you have $1,200.00 available each year to invest for the next 10 consecutive years. You can invest $100.00 at the beginning of each month for the next 120 months. Alternatively, you can invest $1,200.00 at the beginning of each year for the next 10 years. Post your two ending amounts at the end of ten years. The annual interest rate is 5% compounded quarterly.

Question 1: Compute the future value of these two options at the end of the ten-year timeline. Explain how the time value of money affects your personal savings and investment decisions. Discuss how inflation relates to the time value of money

Reference no: EM132559504

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