30 years: Financial markets trader
Time Value of Money is arguably the most important concept in the world of business and finance. In this video, Abdulla explains the concept of Time Value of Money, step by step.
Time Value of Money is arguably the most important concept in the world of business and finance. In this video, Abdulla explains the concept of Time Value of Money, step by step.
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6 mins 8 secs
The concept of the Time Value of Money (TVM) is that money has a value today (its Prevent Value or PV) that can be invested at a given interest rate to derive a higher Future Value (FV). For value comparisons, FV can be discounted to a PV equivalent. PV can be compounded to find its FV.
Key learning objectives:
Define the Time Value of Money
Identify the equation used to calculate TVM
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FV = PV x (1+rp)periods(n)
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