Time value of money: Learn how to calculate the present and

Learn how to calculate the present and future value of money based on its potential earning capacity and inflation. See how TVM affects financial decisions, such as investment, loan, and pricing. The time value of money is the greater benefit of receiving money now rather than receiving later. It is founded on time preference. The principle of the time value of money explains why interest is paid or earned? Interest, whether it is on a bank deposit or debt, compensates the depositor or lender for the time value of money . 2. Concept of Time Value of Money Important terms or concepts used in computing the time value of money are- (1) Cash-flow (2) Cash inflow Understand the time value of money (TVM), including key concepts, formulas, compounding, inflation impact, and real-world business and investment examples. Time Value of Money (TVM) principle in finance acknowledges money 's changing worth over time . Learn about its meaning, full form, formula, its calculation how TVM impacts investments and significance in financial decision-making.