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Impact of future value in financial decision?
The future value of money is important in a business decision because you don't want to get less than the future value. You also want to make sure you make money if you will not have access to your money.
Which term is defined as the value of a current sum of money at a specified date in the future?
It is called the 'future value' .
What is the current value of a future sum of money called?
present value
Which of these functions of money allows to save their money to use in the future?
storehouse of value
What is the current value of future sum of money called?
The current value of a future sum of money is called its "present value." Present value represents the amount of money that needs to be invested today at a certain interest rate to equal the future sum at a specified date. This concept is fundamental in finance and investment analysis, as it helps compare the worth of money received at different times.
What does time value of money refer to?
The time value of money is the increase in, or future/prjected value of, an amount of money, due to the implied interest earned on it over a period of time.
Which of these functions of money allows people to save their money to use in the future?
Storehouse of value. (:
What functions of money allows people to save their money to use in the future?
storehouse value
What is the future value of monthly deposits?
The future value of monthly deposits is the total amount of money accumulated over time by consistently adding money to an investment or savings account on a monthly basis.
What is the importance of time value of money in financial decision making?
The importance of time value of money in financial decision making is because money in your today is worth more than the sum at a future date. If you take the money you have today and invest it, you will have more money in the future than if you wait to take the money.
What happens to the future value of money when the inflation exceeds the interest rate?
it will increase
How does Time Value of Money determine the valuation of bonds?
The Time Value of Money is a foundational principle in finance that states that money received today is worth more than the same amount received in the future due to its potential earning capacity. In the context of bond valuation, the Time Value of Money is used to calculate the present value of future cash flows generated by the bond, including interest payments and principal repayment. By discounting these future cash flows back to their present value using an appropriate discount rate (which accounts for the time value of money), the current price of the bond can be determined.
