Time Value Of Money / Interest Rates Chart Summari

Time Value of Money / Interest RatesChart summarizing the details of the investment for both Bob and LisaPartyAge at start Age at stop AmountcontibutedNumber of years of contributionPlanned retirement ageNumber of Years to retirement Capital at stop Capital at retirement Lisa 20 32 2,000 13 65 33 43,100 401,922 Bob 32 65 2,000 33 65 - 254,517 254,517 From the chart it can be seen that Lisa had a significantly more amount of retirement savings than Bob. This is despite the fact that Bob contributed much more and for longer than Lisa. Bob contributed $66,000 while Lisa contributed $26,000. From the time value of money perspective we see that Lisa contributed early thus her money is worth more than Bob who stated his contributions much latter In the end Lisa’s contribution results on a higher value because it was made early and has benefited from time value of money. Lisa’s contribution increases in value over a span of 33 years while Bob’s increases over 16.5 years on average. This is exactly half of what Lisa’s contribution increased by.This shows why