time value of money

How to Calculate Time Value of Money?

There are several key formulas used to calculate TVM:
Present Value (PV): PV = FV / (1 + r)^n
Future Value (FV): FV = PV * (1 + r)^n
Net Present Value (NPV): NPV = Σ [CFt / (1 + r)^t]
Where:
PV = Present Value
FV = Future Value
r = rate of return
n = number of periods
CFt = cash flow at time t
Understanding these formulas can help entrepreneurs make better investment decisions, assess funding options, and manage cash flow more effectively.

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