The time value of money is an important concept because it is one of the fundamental concepts used in making investment and other financial decisions. It is the foundation of the concept of present value.Know More
The fundamental premise of the time value of money is that money received earlier is worth more than money received at a later time. Over time, the value of money changes due to outside factors such as inflation and interest. Inflation is an increase in the general level of prices, and, over time, it decreases the value of money. As a result, a given amount of money will purchase a smaller basket of goods in the future. Interest is money paid for the use of money, as in an auto or home loan.
Receiving cash sooner rather than later is preferred for a couple of other reasons. First, individuals generally prefer present consumption to future consumption. To entice a consumer to forgo present consumption in favor of future consumption, he must be offered more future consumption in exchange. The cost of future goods in today's money is known as their present value. Also, money now is worth more than money later because of the risk that future payment might never be received. The reasons for this risk include default and death.Learn more about Financial Calculations
International money orders are used in the same way as domestic money orders. According to the United States Postal Service, 29 countries cash international money orders. Money orders sent abroad are issued for amounts up to $700, while domestic money orders are issued for amounts up to $1,000.Full Answer >
The annual business revenue is how much money a company generates in a year, whether from sales or interest from investment. Companies must keep up with annual revenue as it is a number used for tax purposes.Full Answer >
Your employer is legally obligated to deduct money from your paycheck, according to the Legal Aid Society - Employment Law Center. There are only a few mandated deductions you should expect.Full Answer >
An annual percentage rate is used to refer to the yearly fee that a customer pays for borrowing money and is often called APR. An APR is most commonly used in cases of loans, credit cards or other credit agreements.Full Answer >