The third concept

Bas on these trends your money will likely be worth more now than it will be in years. Banner klo Concept of Time Value of Money Time value of money concept TVM is an important basis in finance that describes how the value of money can change over time. The following are the main concepts that form the time value of money Time value of money Present Value The first concept is Present Value PV which refers to the amount of money you have now that may increase in value in the future.

This is because the money

You have now can be invest and Norway WhatsApp Number List generate profits or returns on investment. To calculate PV a mathematical formula is usually us involving interest rates and time periods. For example you have two options receive IDR million now or IDR million years later. If you can invest the money at an interest rate of per year then accepting IDR million now would be a better decision. Because if invest in years the money will increase to more than IDR million. Also read Net Present Value Definition Benefits Formula and Differences from Present Value.

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The future value of money

Future Value The second Russia Phone Number List concept is Future Value FV which is the amount of money you will earn in the future for the money you have invest now. This illustrates the potential growth of money over time. For example if you save IDR thousand per month in a savings account with an annual interest rate of how much money will you have in total in years Using the FV formula you can calculate that your total money will be around IDR million after years. Annuity value Annuities is annuities which include a series of payments or receipts of money at certain time intervals.

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