**They are:**

- Number of time periods involved (months, years)
- Annual interest rate (or discount rate, depending on the calculation)
- Present value (what you currently have in your pocket)
- Payments (If any exist; if not, payments equal zero.)
- Future value (The dollar amount you will receive in the future.

Contents

- What are the factors of time value of money?
- What are the three aspects included in the time value of money?
- What are the four basic parts of the time value of money equation?
- What are the factors considered in time value of money Mcq?
- Which of the following items reflects the time value of money?
- What are the five basic functions of time value of money?
- What are the two principles of the time value of money?
- What do you think is the importance of understanding time value of money?
- What are the examples of time value of money?
- Which of the following best describes the concept of time value of money?
- Which of the following are core concepts related to the time value of money?
- What 5 variables are essential to any time value problem although not always used at the same time?
- What are the advantages of time value of money?
- What are the determinants of capital structure?
- Which financial principle helps you figure out how long it takes your money to double in value?
- What are important things to know about the Rule of 72?
- How are present values affected by changes in interest rates?

## What are the factors of time value of money?

The exact time value of money is determined by two factors: **Opportunity Cost, and Interest Rates**.

## What are the three aspects included in the time value of money?

3 Basic Types of Compounding Problems

These time value of money problems include **finding the future value of a lump sum, the future value of a series of payments, and the payment amount needed to achieve a future value**.

## What are the four basic parts of the time value of money equation?

What are the four basic parts (variables) of the time-value of money equation? The four variables are **present value (PV), time as stated as the number of periods (n), interest rate (r), and future value (FV)**.

## What are the factors considered in time value of money Mcq?

Money has time value because: **Individuals prefer future consumption to present consumption**.**Present value of annuity table.**

- Present value interest factor of a single cash flow.
- Present value interest factor of an annuity.
- Future value interest factor of a single cash flow.
- Future value interest factor of an annuity.

## Which of the following items reflects the time value of money?

b. **Inflation premium**. The impact inflation has on the time value of money is that it decreases the value of a dollar over time. The time value of money is a concept that describes how the money available to you today is worth more than the same amount of money at a future date.

## What are the five basic functions of time value of money?

Most Excel time value of money functions contain **four or five basic inputs**.**Understanding Excel Time Value of Money Functions**

- Pv – present value. …
- Fv – future value. …
- Nper – number of periods. …
- Rate – interest rate for period. …
- Pmt – periodic payment.

## What are the two principles of the time value of money?

**Money can grow only if it is invested over time and earns a positive return**. Money that is not invested loses value over time. Therefore, a sum of money that is expected to be paid in the future, no matter how confidently it is expected, is losing value in the meantime.

## What do you think is the importance of understanding time value of money?

The time value of money is important because it **allows investors to make a more informed decision about what to do with their money**. The TVM can help you understand which option may be best based on interest, inflation, risk and return.

## What are the examples of time value of money?

For example, **$100 today would be worth $110 in one year, if you can earn 10% interest**. Therefore, a payment of $110 in one year is equivalent to $100 made today. The time value of that $100 is the $10 of interest it could earn over that time period.

## Which of the following best describes the concept of time value of money?

Which of the following best describes the concept of the time value of money? **Increases in an amount of money as a result of interest earned**.

which of the following are core concepts related to the time value of money? – **inflation causes the value of money to be worth less over time.**

## What 5 variables are essential to any time value problem although not always used at the same time?

There are Always Five Variables

Every time value of money problem has five variables: **Present value (PV), future value (FV), number of periods (N), interest rate (i), and a payment amount (PMT)**.

## What are the advantages of time value of money?

The time value of money is important because it **allows investors to make a more informed decision about what to do with their money**. The TVM can help you understand which option may be best based on interest, inflation, risk and return.

## What are the determinants of capital structure?

The determinants of capital structure are **firm characteristics such as growth, firm size, collateral value of assets, profitability, volatility, non-debt tax shields, uniqueness, industry**, etc. Each determinant of capital structure may have several indicators.

## Which financial principle helps you figure out how long it takes your money to double in value?

The Rule of 72

**The Rule of 72** is a simplified formula that calculates how long it’ll take for an investment to double in value, based on its rate of return.

## What are important things to know about the Rule of 72?

The Rule of 72 is **a calculation that estimates the number of years it takes to double your money at a specified rate of return**. If, for example, your account earns 4 percent, divide 72 by 4 to get the number of years it will take for your money to double.

## How are present values affected by changes in interest rates?

How are present values affected by changes in interest rates? **The lower the interest rate, the larger the present value will be**.