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TIME VALUE OF MONEY

Financial Management 1 Semester 1

TIME VALUE OF MONEY


Process of Compounding Process of Discounting Future Value of a Single Cash Flow Present Value of a Single Cash Flow Future Value of an Annuity Present Value of an Annuity Future and Present Value of an Annuity Due Effective Rate of Interest/Discount

Time Value of Money


Future Value of a Single Cash Flow n FV = PV 1 + k where FV = future value of a single cash flow PV = present value of investment k = interest rate n = number of years

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