Time Value of Money

I’ve taken the game theory class through coursera previously, and really enjoyed it.  I signed up for the cryptography class, but life got in the way and I had to “drop out”.  The Intro to Finance class just started.  So far, it’s a repetition of the engineering economics class I had in grad school (time value of money), but it got me thinking – when I generally do “math in my head”, I don’t generally consider the time value of money – it’s a bit of math, and I generally don’t feel like getting out Excel to do the math – especially when the interest rates are changing monthly (makes the math really nasty).

Does it really matter?  Technically, yes, it does, but the amounts for the balances I have are pretty small that they kind of get lost in the shuffle.  If you’re working with very large balances – like figuring out how much you need to retire on or how much you need to save for college, then it makes sense to consider it, but I don’t think it’s that big of a deal in daily use (unless you’re running a business)

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