The term time valueof money and
Net Present Value reflects the relation between money and time. In thebusiness world, every time is precious. A small amount of investment can
provide significant returns later. This is also represented as TVM. (
Target Market)
TVM is the basics of money related to time. For example, the marketvalue of things is much higher now than they were earlier. This was always and will
be the case. This is of great profit for a businessman as prices of market
stocks rise. Students in the field of stores and business can find this a very confusing
topic; that is why most of them seek assignmenthelp
(Effective interest rate).
Most experts in
Procter And Gambleand college application essayhelp consider TVM as discounting principle. This is because it acts as a
discounting time bridge which the present and the future. This means the amount
paid now will be worthless in the future because the price at that time would
be much higher, but the receiving payment will be based on the deal made in the
present.
The formula for the time value of money
The formula for TVM is:-
FV = PV x [ 1 + (i / n) ] ^(n x t)Where, FV= the future value ofthe product PV= the value of the product rightnow I= interest in the product N= number of periods provided T= timeBenefits Of TVMNow let’s have a look at thebenefits of TVM.· The concept of TVM generates compoundinterest which will provide more money in future years. This is significant for
the party receiving the money.· This helps in return investment.For example, a person who is earning 4000 now can get an interest of 500 along
with 4000 in the future, which would result in 4500.· This applies to inflammation aswell. What comes for 500 now may come at the cost of 800 in the future years.
So it is better to follow time value for money and have it now. So this is how the timevalue of money works.Source:http://colleye.96.lt/members/ellariasandy/buddyblog/my-posts/15200/
