In this comprehensive video, Craig Lemoine PhD, MRFC, CFP® breaks down the core concepts behind the time value of money. He starts by explaining the five key elements in any time value of money problem: present value, payments, future value, interest rate, and number of periods.

Craig then dives into formulas for calculating future value of a single sum and present value of a single sum. He demonstrates these through examples, showing how compounding and discounting work algebraically.

The video covers the importance of time value of money for analyzing opportunity costs and making smart financial decisions. Craig illustrates this with a compelling example comparing investing $1,000 in Microsoft's IPO in 1986 versus putting it in a savings account.

A key focus is understanding effective interest rates and how compounding frequency impacts growth. Craig works through examples with annual, monthly, and continuous compounding to calculate effective rates and see their impact over time.

The presentation also explains the different applications of time value of money concepts like compounding for future values (e.g. retirement, college funds) and discounting for present values needed today.

Finally, Craig provides an Excel tutorial, showing how to set up time value of money calculations efficiently in spreadsheets using built-in functions like the EFFECT function for effective rates.

Whether you're a finance student or want to level up your personal finance skills, this video offers a clear and engaging explanation of time value of money fundamentals from an expert instructor.