Question
What is meant by the term time value of money? Why is a present value always less than the future value to which it relates?
Step 1
The time value of money is a financial concept that states that a sum of money is worth more now than the same sum will be in the future due to its potential earning capacity. This principle is based on the idea that money available at the present time can be Show more…
Show all steps
Your feedback will help us improve your experience
Amy Jiang and 89 other educators are ready to help you.
Ask a new question
Labs
Want to see this concept in action?
Explore this concept interactively to see how it behaves as you change inputs.
Key Concepts
Recommended Videos
What is meant by the present value of money?
Mathematics of Finance
Simple and Compound Interest
Transcript
18,000,000+
Students on Numerade
Trusted by students at 8,000+ universities
Watch the video solution with this free unlock.
EMAIL
PASSWORD