Interest compounding, the time-value-of-money and the present value of a future cash-flow are key integral parts of financial education. This unit will introduce you to the key steps of the financial-planning process and highlights its importance for achieving financial goals and for individual financial well-being.

What you will learn

By the end of this unit, you will be able to:

  1. Understand and identify the different steps in the financial planning process, as well as the ways with which financial goals can be set.
  2. Operationalise the concepts of the opportunity cost, interest compounding, and discounting for assessing the time of value of money.
  3. Calculate the future value of present cash flows and apply the process of compounding.
  4. Calculate the present value of future cash flows and apply the process of discounting.
  5. Apply valuation principles to calculate the future value and the present value of a series of cash flows.
  6. Understand loan amortisation, distinguishing between principal and interest payments and solve for each factor in time value of money calculations, for both single sums and annuities.

Course Info

Length: One 1 hour video

Institution: University of Glasgow

Level: low

Effort: 5 hours

Schedule: Self-paced