The term time value of money and Net Present Value reflects the relation between money and time. In the business 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 market value 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 assignment help (Effective interest rate).

Most experts in Procter And Gamble and college application essay help 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 of the product

             PV= the value of the product right now

               I= interest in the product

              N= number of periods provided

               T= time

Benefits Of TVM

Now let’s have a look at the benefits of TVM.

• The concept of TVM generates compound interest 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 as well. 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 time value of money works.

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