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# Time Value of Money

More From: WallStreetMojo
6 ratings | 44 views
In this video on Time Value of Money, we look at Time value of money formula along with its examples. We see how to calculate Time value of money with different case studies. What is Time value of Money? ------------------------------------------------ Time Value of Money concept tells us that the money today is worth more than the same amount in the future. This is because of the potential earning power of the given amount of money. Time value of Money Formulas -------------------------------------------------- 1) Future value of Single Amount FV = PV (1+r)^n 2) Present value of a single amount PV = FVn [1 / (1+r)^n] 3) Future value of Annuity FVAn = A [(1+r)^n – 1] / r 4) Present value of Annuity A = [{1 – (1/1 + r)^n} / r] Examples of Time Value of Money Time value of money calculations are used in Valuation Methodologies like Dividend Discount Model and Discounted Cash flow Analysis. It is also used to calculate Bank EMIs, pricing bonds etc. You can learn more about Time value of money concept here - https://www.wallstreetmojo.com/time-value-money/
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James Stein (10 days ago)
Jacob Kaminski (16 days ago)
Helps me to know easily what actually it is..
WallStreetMojo (15 days ago)
Thanks! I am glad this helped you.
Robert Jasper (22 days ago)
This is a great video for learning or refreshing knowledge.
WallStreetMojo (15 days ago)
Thanks Robert!
Seth Reno (26 days ago)
WallStreetMojo (15 days ago)
Thanks!!
Ravikant Boddu (30 days ago)