Time value of money (present and future value)

Topic Page

Questions

• How does one calculate the net present value (NPV) of a sum of money?
• What is the formula for a present value of a sum of money?
• What is the time value of money?
• Why is it important to understand the time value of money?
• How does one calculate the present value of a perpetuity?
• How does one calculate the present value of a bond?
• How is the concept of the time value of money important to a company?
• Why use present value?
• Why use future value?
• What is the present value of a sum of money?
• What is the future value of a sum of money?