A Journey Through Time: From The Present Value To The Future Value And Back Or: Retirement Planning: A Comprehensible Application Of The Time Value Of Money Concept

Main Article Content

Carolin E. Schmidt

Keywords

Time Value of Money, Retirement Planning, Private Pension Scheme, Future Value, Present Value

Abstract

Real-life applications of financial concepts are a valuable method to get students engaged in financial topics. While especially non-finance majors often struggle to understand the importance of financial topics for their personal lives, applying these theories to real-life examples can significantly improve their learning experience and increase their understanding. This teaching case demonstrates how the time value of money concept can be applied to one’s private retirement planning. Because of its simple assumptions, the case is targeted at an audience with little financial knowledge and can be used in finance as well as in accounting classes.

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