Finance Questions? Ask a Financial Expert for Answers ASAP
The time value of money is the value of money figuring in a given amount of interest earned over a given amount of time. The idea that money available at the present time is worth more than the same amount in the future due to its potential earning capacity. This core principle of finance holds that, provided money can earn interest, any amount of money is worth more the sooner it is received.
It is certainly important for the accountants to have an understanding of compound interest, annuities and present value and the future of value concepts while doing any feasibility study of any project / transaction or in any given business environment.
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