Present value is a useful mathematical formula designed to figure out if money received now is worth more than money received later. What Is Present Value? Terms Associated With the Present Value of ...

Net present value and the profitability index are helpful tools that allow investors and companies make decisions about where to allocate their money for the best return. Net present value tells us ...

The basic premise of finance is that money has time value -- a dollar in hand today is worth more than a dollar in the future. The study of finance seeks to make it possible to compare the value of a ...

In the world of finance, an annuity is a contract between you and a life insurance company in which you give the company a lump sum or series of payments, and in return, the insurer promises to ...

Image source: Flickr user Ken Funakoshi. A perpetual annuity, also called a perpetuity, promises to pay a certain amount of money to its owner forever. A classic example would be that of a perpetual ...

Net present value (NPV) represents the difference between the present value of cash inflows and outflows over a set time period. Knowing how to calculate net present value can be useful when choosing ...

Calculating the interest rate using the present value formula can at first seem impossible. However, with a little math and some common sense, anyone can quickly calculate an investment's interest ...

The time value of money sounds like one of those boring economic concepts that a small business owner doesn't have time for – but that would be wrong. Future value and present value are monetary ...

Too many financial decisions are made without factoring in the time value of money. Whether providing financial planning advice related to a client’s retirement, advising a client about a business ...

Small business owners frequently make decisions about how to invest money to increase profitability. Part of being a good business manager is the ability to analyze the income potential of long-term ...

The time value of money (TVM) is a financial concept that holds that an amount of money is worth more in the present than the same amount of money at a future date. The reason for this is the ...

Net present value and the profitability index are helpful tools that allow investors and companies make decisions about where to allocate their money for the best return. Net present value tells us ...