Time Value of Money The time value of money concept is an important concept that aids in the financial management of organizations. This concept is loosely based on the fats that a dollar one has today is worth more than the expectation that you will receive a dollar in the future. TVM examines and compares the future value of money as well and the present value of money. One key concept of TVM is that a single sum or a series of equal, unevenly �spaced payments or receipts promised in the future can be converted to an equivalent value today. (Gallager 1996) Considering this, financial managers can determine the value of that a sum or group of sums will grow in the future. In order to calculate TVM you can use any four of the following five values: interest rate, number of periods, payments, present value, and future value. These values are used to calculate problems involving loans, mortgages, leases, savings, and annuities. TVM allows lenders to demand interest on loans because they offer the money to a borrower right now as opposed to saving the money and purchasing with ......

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