Find the
Time value of money (TVM) means that the amount of money received today will be worth more than the amount of money received tomorrow. It is based on the concept that money has time value. It is based on the assumption that earlier receipts are reinvested in order to bring returns before the later receipts began to generates. The process of finding the future value based on the initial investment, rate of interest and the compounding periods is called compounding.
It can be calculated as follows:
Where,
FV = Future value
PV = Present value
r = Interest rate
n = Number of compounding perod
t = Number of years
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