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General Overview :Time Value Function

  • Present value (PV) is the dollar amount now of a sum expected to be received or paid in the future, adjusted for a specified interest rate.
  • Future value (FV) is the dollar sum that an amount will grow into at a specified point in time, given a specific interest rate.
  • Interest rate (r) refers to the rate at which money accrues over a certain period of time, whether simple or compound.
  • Period of time (n) is the duration for which money has been lent or borrowed.

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