Last week, I conducted a webinar on Time Value of Money (TVM). I demonstrated five TVM formulas to do analysis and make better financial decisions.

After the webinar, Ian, my partner, asked if the TVM formula could calculate his annual returns from an investment of a dividend stock. I was given the following details:

Investment Price = S$ 1.037 (after brokerage fees)
Year 1 Dividends = 7.504 cents
Year 2 Dividends = 7.759 cents
Year 3 Dividends = 8.076 cents
Year 4 Dividends = 8.192 cents
Year 5 Dividends = 8.560 cents
Market Price (4 December 2021) = S$ 1.87

We need an advanced TVM formula to calculate Ian’s returns.
Hence, in the next live webinar, I’ll share how to calculate IRR and XIRR and use them to make wiser financial decisions.

Apart from Ian’s investment, we’ll explore:

  • How to use IRR to assess returns of a savings plan (with irregular premium and cash payout)?
  • How to use XIRR to assess stocks, unit trust, properties?
  • How to analyse the following situation where I put up the problem as homework for all attendees:

Question: Which way do you want to get paid?

A. $10,000 now
B. $10,100 next month
C. $12,000 one year later
D. $14,000 two years later
E. $5000 now, $7000 one year later


Financial educator, author and trainer

    2 replies to "Time Value of Money (Part 2) – Advanced Level of Financial Literacy"


      I am a new member. If the dividend I received is free stocks, not cash, how to calculate my CAGR?

      • KCLau 

        If it is free stock, that means the money is still in the account. Therefore, technically no cash flow in or out.
        So can just ignore it because there is no transaction in your calculation.
        Then the value will be reflected at the “market value” you use in your entire Cash Flow schedule (the final line)

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