From the course: Accounting Foundations: Making Business Decisions Using IRR and NPV
Join today to access over 22,600 courses taught by industry experts or purchase this course individually.
Overview of time value of money terms
From the course: Accounting Foundations: Making Business Decisions Using IRR and NPV
Overview of time value of money terms
- [Instructor] With the time value of money, we will ask four questions with regard to these calculations, when, how often, how long, and how much. First is the question when. Am I dealing with an amount now or an amount in the future. An amount to be paid or receive now is called a present value. We often use the designation PV. An amount to be paid or received in the future is called a future value or FV. For example, let's say, I tell you, I'll give you $100. The natural question is when? Right now, next week, next year, or in 100 years. The value of that $100 depends on when you receive it. If you receive it now, the present value, the equivalent amount that it's worth right now is $100 dollars. If you'll receive it in one year then the $100 is a future value. An amount to be paid or received in the future. So what's the present value the right now of value of a future value of $100 to be received one year…
Practice while you learn with exercise files
Download the files the instructor uses to teach the course. Follow along and learn by watching, listening and practicing.
Download courses and learn on the go
Watch courses on your mobile device without an internet connection. Download courses using your iOS or Android LinkedIn Learning app.