01
Time value of money is the principle that the value of a cash flow depends on when it is received or paid.
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02
Present value is the value today of a future cash flow after discounting it using an assumed rate and time period. Future value is the value at a specified later date of money held or invested today after applying an assumed rate of return.
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With periodic compounding at a constant rate, future value can be calculated as FV = PV × (1 + r)^n, where r is the rate per period and n is the number of periods.
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