Hello, in this module, let's discuss the time value of money. First, let's think about some important financial decisions we make in our life. For most of us, we begin our career in our twenties, and then, we consider buying a car or even a home. During the initial years of our job, it's difficult to buy a car or home since our savings would be little. One thing we are sure of is that we can accumulate enough wealth in our lifetime through our hard work. Yet, we wouldn't want to delay our purchases until we are old. What we can do is borrow money from a bank to finance the purchases of both car and home. In this case, financial institutions, like banks, help us to shift some of our future earnings to the present, so that we can purchase a home worth hundreds of thousands of dollars. When we have a job and receive our salary, we don't want to spend all our income, we also want to save some money for retirement. We deposit a portion of our salary into a savings account such as 401K plan. Some employers may also make matching contributions. We want to allocate some of our current income to the retirement plan because we want to maintain our standards of living even after we retire. Making contributions to the retirement account will help us to shift some of our current earnings to the future, so that we can retire worry-free. In addition to the retirement savings, we also want to make some investments if we have some extra money. There are a bunch of investment options for us to choose from such as stocks, bonds, money markets, and others. But our investment goal is pretty straightforward, we want to sacrifice a part of our current consumption in exchange for greater future rewards. From all these daily examples, you can see they have something in common. With the help of financial institutions, we move cash flows either from present to the future or from future to present so that we can smooth our consumption. If we want to know how to allocate cash flows across time, we have to value the trade-offs between today's dollars and future dollars. This is the time value of money. In this module, let's get introduced to the concept of present value and future value, how to convert the present value to future value and vice versa, how to deal with single cash flows as well as multiple cash flows, and how to calculate the net present value. Next, let's study the compounding frequency. Financial institutions may pay interest annually, semi-annually, monthly, or daily. How do we compare the value of investments if we receive the different approach of interest rates from various financial institutions? How do we convert a stated annual interest rate to an effective annual interest rate? Lastly, lets study two special categories of cash flows, perpetuity and annuity. Using these analysis tools, we should be able to value the cash flows generated by a lot of financial instruments. You can consider this module as the foundation of financial asset valuation.