1. + Time Value of Money Demonstrate understanding of the time value of money by explaining the options of the Mega Millions Jackpot

2. + What would you rather have: $10,000 today or $10,000 next year?

3. + Today! This is the perspective you must take to understand the value you are trying to calculate!! If you are asked for future value of a present value, the value must increase… If you are asked for present value of a future value, the value must decrease

4. + Formulas Present Value PV = FV / (1+r)^n Future Value FV = PV x (1 + r)^n A dollar invested today will provide more than a dollar in the future because of the interest (profit) it can earn A dollar to be received in the future is worth less than a dollar today because of the lost opportunity for investment