Time Value of Money
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When we discuss the concept of money, both invested and received, we will necessarily have to consider the impact of time. One investment rule states that "a dollar today is worth more than a dollar received a year from today". Why?
It's due to the earnings I will lose from the interest that I give up by not investing that dollar for a year. The principle of considering interest is critical to any investment decision. A discussion on the time value of money will involve the topics of interest, discounting, future value (FV), and present value (PV). Watch this video on the time value of money.
It's due to the earnings I will lose from the interest that I give up by not investing that dollar for a year. The principle of considering interest is critical to any investment decision. A discussion on the time value of money will involve the topics of interest, discounting, future value (FV), and present value (PV). Watch this video on the time value of money.
Source: ProfAlldredge, https://www.youtube.com/watch?v=fOIa7ekArMs
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Last modified: Monday, 27 June 2022, 5:37 PM