On Demand

Time Value of Money


Learn about the time value of money and how it affects financial decisions.  Explore practical applications of present (discounted) and future (compounded amount of) values of money, such as retirement, financial planning, capital budgeting, leases, and loans.


Looking to register a group? Contact Us.

SKU: MA002 Category: Tag:


It is not possible to treat today’s and tomorrow’s dollars the same. The concept of time value of money (TVM) refers to “a dollar now is worth more than a dollar to be received later”. This course looks at the relationship between the present (discounted) and future (compounded amount of) values of money. Applications of present values (PV) and future values (FV) include loans, leases, bonds, growth rates, capital budgeting investment selection, and effects of inflation on the organization. It is possible to solve for many different types of unknowns, such as interest rate, annual payment, number of periods, present amount, and future amount. PV and FV calculations have many applications in accounting, financial, and investment decisions.

By the end of this course, you will be able to:

  • Recognize the time value of money and how it affects financial decisions
  • Explain the components of the discount rate used in such calculations
  • Calculate various amounts relating to time value of money (e.g., number of periods, interest rate, present value, payments, future value) using Excel, a financial calculator, or manually (as appropriate)
  • Explain and apply two key capital budgeting metrics: net present value (NPV) and internal rate of return (IRR)
  • Recognize the advantages and disadvantages of NPV and IRR and explain why NPV is considered the superior of the two metrics