The time value of money sounds like one of those boring economic concepts that a small business owner doesn't have time for – but that would be wrong. Future value and present value are monetary ...

Julia Kagan is a financial/consumer journalist and former senior editor, personal finance, of Investopedia. Marguerita is a Certified Financial Planner (CFP), Chartered Retirement Planning Counselor ...

Every commodity has a value now, and will have a greater or lesser value in the future. This is particularly applicable to currency. The concept of future value is a fundamental of investment and ...

Calculating the interest rate using the present value formula can at first seem impossible. However, with a little math and some common sense, anyone can quickly calculate an investment's interest ...

Present value (PV) is an accounting term meaning the value today of some amount of money expected to be available one or more years in the future. The concept behind this is that money available in ...

The net present value (NPV) method can be a very good way to analyze the profitability of an investment in a company, or a new project within a company. But like many methods in finance, it is not the ...

Calculate the present value of each year's cash flow by dividing by (1 + discount rate)^number of years. Sum all present values to find the total value of projected cash flows, which in this example ...

NPV calculates profitability using all projected cash inflows and outflows, considering time value of money. A positive NPV suggests a profitable project; a negative NPV suggests a loss. NPV's ...

Claire Boyte-White is the lead writer for NapkinFinance.com, co-author of I Am Net Worthy, and an Investopedia contributor. Claire's expertise lies in corporate finance & accounting, mutual funds, ...

In the world of finance, an annuity is a contract between you and a life insurance company in which you give the company a lump sum or series of payments, and in return, the insurer promises to ...

The net present value (NPV) method can be a very good way to analyze the profitability of an investment in a company, or a new project within a company. But like many methods in finance, it is not the ...

Credit: By discounting every future $3,000 cash flow back at a rate of 10%, and subtracting the initial cash outlay of $15,000, we arrive at a net present value of $3,433.70 for this project. Under ...