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This paper will explain how annuities affect time value of money (TVM) and investment outcomes. In addition, this paper will briefly address the impact of discount and interest rates, present value, future value, opportunity cost and the impact interest has on money being borrowed.
Time Value of Money
Present Value is an amount today that is equivalent to a future payment or series of payments that has been discounted by an appropriate interest rate. The future amount can be a single sum that will be received at the end of the last period, as a series of equally spaced payments (an annuity), or both...
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