For example, the future value sum \({\displaystyle FV}\) to be received in one year is discounted at the rate of interest \({\displaystyle r}\) to give the present value sum \({\displaystyle PV}\):
\({\displaystyle PV={\frac {FV}{(1+r)}}}\) Some standard calculations based on the time value of money are:
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Time value of money - Wikipedialations for time value of money derive from the most basic algebraic expression for the present value of a future sum, "discounted" to the present by an amount equal to the time value of money. <span>For example, the future value sum F V {\displaystyle FV} to be received in one year is discounted at the rate of interest r {\displaystyle r} to give the present value sum P V {\displaystyle PV} : P V = F V ( 1 + r ) {\displaystyle PV={\frac {FV}{(1+r)}}} Some standard calculations based on the time value of money are: Present value: The current worth of a future sum of money or stream of cash flows, given a specified rate of return. Future cash flows are "discounted" at the discount rate; the higher Summary
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