Time Value Of Money

Business / Taxes / Time Value Of Money: The time value of money is money's potential to grow in value over time. Because of this potential, money that's available in the present is considered more valuable than the same amount in the future. For example, if you were given $100 today and invested it at an annual rate of only 1%, it could be worth $101 at the end of one year, which is more than you'd have if you received $100 at that point. In addition, because of money's potential to increase in value over time, you can use the time value of money to calculate how much you need to invest now to meet a certain future goal. Many financial websites and personal investment handbooks help you calculate these amounts based on different interest rates. Inflation has the reverse effect on the time value of money. Because of the constant decline in the purchasing power of money, an uninvested dollar is worth more in the present than the same uninvested dollar will be in the future.

Other Words for Money

Money Noun Synonyms: currency, legal tender, medium of exchange, specie, (hard) cash, ready money, banknotes, paper money, notes, bills, coin(s), change, small change, (filthy) lucre, pelf, shekels, lolly, readies, folding money, cold (hard)
Money Adjective Synonyms: resources, wealth, fortune, funds, capital, wherewithal, affluence, means, (liquid) assets, riches, bundle
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Other Words for Time

Time Noun Synonyms: period, interval, stretch, spell, patch
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Internal Rate Of Return (IRR)

Business / Finance / Internal Rate Of Return (IRR): Dollar-weighted rate of return. Discount rate at which net present value (NPV) investment is zero. The rate at which a bond's future cash flows, discounted back to today, equal its price. MORE

Net Present Value (NPV)

Business / Finance / Net Present Value (NPV): The present value of the expected future cash flows minus the cost. MORE

Present Value

Business / Finance / Present Value: The amount of cash today that is equivalent in value to a payment, or to a stream of payments, to be received in the future. To determine the present value, each future cash flow is multiplied by a pr MORE

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