Warning: include_once(/home/coolinve/public_html/conf/db_config.php) [function.include-once]: failed to open stream: No such file or directory in /home/bgwebdiz/public_html/coolinvesting/dictionary/index.htm on line 28
Warning: include_once() [function.include]: Failed opening '/home/coolinve/public_html/conf/db_config.php' for inclusion (include_path='.:/usr/lib/php:/usr/local/lib/php') in /home/bgwebdiz/public_html/coolinvesting/dictionary/index.htm on line 28
Warning: include_once(/home/coolinve/public_html/conf/db_select.php) [function.include-once]: failed to open stream: No such file or directory in /home/bgwebdiz/public_html/coolinvesting/dictionary/index.htm on line 30
Warning: include_once() [function.include]: Failed opening '/home/coolinve/public_html/conf/db_select.php' for inclusion (include_path='.:/usr/lib/php:/usr/local/lib/php') in /home/bgwebdiz/public_html/coolinvesting/dictionary/index.htm on line 30
Time Value of Money
Time value of money is based on the premise that money available in the present is worth more than the same amount of money in the future. The whole idea about time value of money stands on the premise that money received now is able to earn interest if deposited in bank or otherwise invested. Present value of money will outgrow the future value of money if with inflation rate calculated in present value.
Present value of money is calculated by the following equation:
PV = FV / (1+i)n, where:
PV = Present Value
FV = Future Value
i = rate at which money will be compounded
n = number of periods
Time value of money is also called present discount value.
| Related Terms: |