Name: 【TED-Ed】The time value of money - German Nande
Uploaded: 2014-11-30T13:06:45.000Z
Duration: 3 min 37 s
Description: Thousands of YouTube videos with English-Chinese subtitles! Now you can learn to understand native speakers, expand your vocabulary, and improve your pronunciation...

Modal verbs - A2

but what does one really have to do with the other?

Sheila knows exactly what she wants to do with that money.

She's had her eye on a nice convertible for a while now.

She knows that if she deposits the money for a year

Sheila knows that the value of her deposit one year from now

will equal the money deposited today plus the interest earned.

And the value of Sheila's deposit next year

we can figure out the future value of Sheila's money

So in a year, the future value will be $11,000.

And there's Sheila, with enough money to buy the car.

Sheila really understands the future value of money.

Now, I just hope she understands the speed limit!

The money seems to be burning a hole in his pocket.

Yes, Timmy, that's a nice car that will surely impress people.

after the first year, you'll have $11,000.

But Timmy, that is still not enough to buy that fancy car.

Why don't you leave the money deposited for another year?

Let's see how your deposit will be doing in two years.

it becomes the value of your money next year,

We can then convert the future value one year from now

to the present value times one plus the interest rate.

by just squaring the value of one plus the interest rate.

Sorry, Timmy, you'll have more money after two years,

I don't know how many more years you'll have to wait,

but I can tell you one way we can figure it out.

Do you see that little number two in the equation?

is the number of years that you are waiting,

Sure, Timmy, we can see how much you'll have in five years.

Let's connect future value and present value across five years.

Let's watch the period increase from two to five.

Sorry, Timmy, you have to wait a little longer.

Yeah! Let's see if you'll be able to buy the car then.

Well, Timmy, it looks like you'll need 26 years to afford this car.

You should ask Sheila for a ride to the beach.

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【TED-Ed】The time value of money - German Nande

present

period

pretty

interest