About Public Provident Fund (India)

About Public Provident Fund (India)

 Public Provident Fund (PPF) is a long term investment which is offered by the Government of India for Retirement planning. Its offer safety and also attracted interest rate and returns that fully exempt from Tax. People can invest a minimum of Rs 500 to a maximum of Rs. 1, 00,000 in one financial year and people will get facilities like Loan, Withdrawal and also Extension of Account.

Eligibility for opening PPF account

PPF account can be opened by People who resident in India and individuals on behalf of minors.
NRI people cannot open a PPF account

PPF Product Features

Attractive interest rate of 8.7% that is fully exempted from Income Tax under section 80 C
Secure long term investments of 15 years
Deposit Amount as low as Rs.500 and maximum Rs.1, 00,000 in one financial year
Deposits can be done maximum in 12 transactions
Loan can be availed between 3rd to 6th financial year
Partial withdrawal facility can be availed from 7th financial year onwards
The account can be extended in a block period of 5 years after maturity

Visit for more details http://en.wikipedia.org/wiki/Public_Provident_Fund_(India)

Time Value of Money

 Time Value of Money 

 

We all want money and we will work hard to earn money. You can earn money how much you want but you need to do proper planning and saving.

Time Value of Money is very much important because the present Money value is not equal to money value after 10 years. Eg:- Present 10000 not equal to future 10000. In numbers it was same, but what you purchase now will not purchase in feature with the same price you purchase now.

Why Present Money Will not Equal to Future Money?

 

I know that you will get this doubt, I think you know about Interest, like that there will be an Inflation which influences the price of products you purchasing. If there is less inflation the price of the product will be less and vise versa. So to make money value equal in future, we need save money. Then Present Amount is Equal to Future Amount.

Eg: - Our Parents tell some stories like that they saw movie at the price of Rs 0.50 Paisa, but in present days we seeing Same Cinema Theater for Rs 100 and more.

Time Value of Money Formulas.

 

The following are the formulas to Calculate Time Value of Money.

Present value of a future sum
Present value of an annuity for n payment periods
Present value of a growing annuity
Present value of a perpetuity
Present value of a growing perpetuity
Future value of a present sum
Future value of an annuity
Future value of a growing annuity

Time Value of Money Formulas

PV = Present Value
FV = Future Value
i or r = Interest Rate or Rate of Interest.
m = number of compounding periods per year
n = time period expressed in years
e = Euler's constant ~ 2.71828...
EAR = Effective Annual Rate.
PMT = the periodic payment or cash flow

Time Value of Money - Excel Formulas

 

If you don't have financial calculates to know Time Value of Money, then you can use Excel Formulas to calculate in Microsoft Excel.

Time Value of Money - Excel Formulas

N = Number of Periods

Rate = Interest Rate

PV = Present Value

PMT = Payment

FV = Future Value

The above is some details about Time Value of Money

Read More Details about Time Value of Money here http://en.wikipedia.org/wiki/Time_value_of_money