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This is the prime reason why people prefer receiving money today rather in the future. Receiving the funds today allows them to invest their money and receive a greater increase presently oppose to the future. As mentioned earlier, there are several financial applications of time value of money. We will discuss such applications below in further detail.
Future Value/Single Amount
"Future value measures what money is worth at a specified time in the future assuming a certain interest rate. This is used in time value of money calculations" (Wilkipedia, 2006). Future value with compound interest and without compound can be calculated two ways: without compound interest FV= PV x (1 + rt)/ 6050=5000 x 1 + 0...
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