Professor of Finance, Ross School of Business
Introduction to Time Value of Money (TVM)
What You'll Learn
- To be able to understand and apply one of the two main building blocks of finance - Time Value of Money (TVM)
- To evaluate alternatives
- To make decisions
4 Modules
16 Hours
4 hrs per module (approx.)
Rating
About Introduction to Time Value of Money (TVM)
The strength of finance is that it takes a structured approach to decision making, with one key building block underlying all decisions — understanding the value of time, or the Time Value of Money (TVM). In this course, we will develop this building block using introductory, and simple, applications. We will learn about the Time Value of Money (TVM), Simple Future Value (FV) , Simple Present Value (PV) , Future Value of Annuity, Loans, compounding, and Valuing Perpetuities. We will introduce the framework in a carefully structured and replicable way to prepare you to explore more advanced applications in the rest of the specialization. In the follow-on courses, we will expand the applications to more complex real-world decisions.
After completing this course, you will have an understanding of how the value of money changes over time. You will understand the implications of all your financial decisions, including saving for the future through different channels and borrowing for future needs. You will leave with the practical knowledge needed to make informed decisions on a wide range of financial decisions.
This course is part of the four-course Foundational Finance for Strategic Decision Making Specialization.
Skills You'll Gain
- Decision Making
- Financial Analysis
- Mathematics
- Quantitative Analysis
- Time Value Of Money
What You'll Earn
- Certificate of Completion
- Certificates of completion acknowledge knowledge acquired upon completion of a non-credit course or program.
Welcome Message
Welcome to Introduction to Time Value of Money (TVM), a course that builds core financial decision-making skills. Learners explore how money’s value changes over time and apply financial reasoning to business, workplace, and personal decisions. This course supports learners preparing for advanced finance study or strategic decision-making roles.
This abbreviated syllabus description was created with the help of AI tools and reviewed by staff. The full syllabus is available to those who enroll in the course.
Course Schedule
Module 1: Time Value of Money - Simple Concepts & Applications
- Video: About This Specialization
- Reading: Specialization Syllabus
- Reading: Course 1 Syllabus
- Video: 1.1 Time Value of Money
- Video: 1.2 Simple Future Value (FV)
- Video: 1.3 Simple FV...
- Video: 1.4 Simple FV: Example
- Video: 1.5 Simple FV: Example 2
- Reading: Note-Formulae
- Reading: Pre-Course Survey
Module 2: Time Value of Money - Simple Concepts & Applications (cont.)
- Video: 2.1 Simple Present Value (PV)
- Video: 2.2 Recap of TVM
- Reading: Note-Spreadsheets
- Graded Assignment: Practice Assignment 1
- Graded: Assignment 1
Module 3: Time Value of Money - Annuities
- Video: 3.1 FV of Annuity: Concept
- Video: 3.2 FV of Annuity: Example 1
- Video: 3.3 FV of Annuity: Example 2
- Video: 3.4 PV of Annuity: Concept
- Video: 3.5 PV of Annuity: Examples
- Reading: Note-Formulae
Module 4: Time Value of Money - Complex Applications
- Video: 4.1 A Loan: The Power of Finance
- Video: 4.2 Compounding
- Video: 4.3 Valuing Perpetuities
- Video: 4.4 Mega Example: Putting it All Together!
- Reading: Note-Spreadsheets
- Graded Assignment: Practice Assignment 2
- Reading: Post-Course Survey
- Graded: Assignment 2
Grading Policy
Learners must earn 70% or higher on each graded assignment to pass the course. There are two practice assignments and two graded assignments, each worth 50% of your final grade.
Course content developed by U-M faculty and managed by the university. Faculty titles and affiliations are updated periodically.
Beginner Level
Some exposure to algebra and problem-solving
