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Time value of money

Index Time value of money

The time value of money is the greater benefit of receiving money now rather than later. [1]

52 relations: Actuarial science, Annuity, Black–Scholes model, Bloomberg L.P., Bond (finance), Cash flow, Compound interest, Debt, Deposit account, Differential equation, Differential operator, Dirac delta function, Discounted cash flow, Discounting, Dividend discount model, E (mathematical constant), Earnings growth, Earnings per share, Exponential growth, Finance, Future value, Geometric series, Green's function, Heaviside step function, Hyperbolic discounting, Integral, Interest, Interest rate, Internal rate of return, Investment, Investor, Makkot, Martín de Azpilcueta, Mathematical finance, Maturity (finance), Natural logarithm, Net present value, Option time value, Ordinary differential equation, Partial differential equation, Perpetuity, Present value, Price–earnings ratio, Rate of return, Real versus nominal value (economics), Return of capital, Rule of 72, School of Salamanca, Spreadsheet, Stock valuation, ..., Talmud, Time preference. Expand index (2 more) »

Actuarial science

Actuarial science is the discipline that applies mathematical and statistical methods to assess risk in insurance, finance and other industries and professions.

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Annuity

An annuity is a series of payments made at equal intervals.

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Black–Scholes model

The Black–Scholes or Black–Scholes–Merton model is a mathematical model for the dynamics of a financial market containing derivative investment instruments.

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Bloomberg L.P.

Bloomberg L.P. is a privately held financial, software, data, and media company headquartered in Midtown Manhattan, New York City.

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Bond (finance)

In finance, a bond is an instrument of indebtedness of the bond issuer to the holders.

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Cash flow

A cash flow describes a real or virtual movement of money.

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Compound interest

Compound interest is the addition of interest to the principal sum of a loan or deposit, or in other words, interest on interest.

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Debt

Debt is when something, usually money, is owed by one party, the borrower or debtor, to a second party, the lender or creditor.

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Deposit account

A deposit account is a savings account, current account or any other type of bank account that allows money to be deposited and withdrawn by the account holder.

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Differential equation

A differential equation is a mathematical equation that relates some function with its derivatives.

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Differential operator

In mathematics, a differential operator is an operator defined as a function of the differentiation operator.

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Dirac delta function

In mathematics, the Dirac delta function (function) is a generalized function or distribution introduced by the physicist Paul Dirac.

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Discounted cash flow

In finance, discounted cash flow (DCF) analysis is a method of valuing a project, company, or asset using the concepts of the time value of money.

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Discounting

Discounting is a financial mechanism in which a debtor obtains the right to delay payments to a creditor, for a defined period of time, in exchange for a charge or fee.

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Dividend discount model

The dividend discount model (DDM) is a method of valuing a company's stock price based on the theory that its stock is worth the sum of all of its future dividend payments, discounted back to their present value.

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E (mathematical constant)

The number is a mathematical constant, approximately equal to 2.71828, which appears in many different settings throughout mathematics.

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Earnings growth

Earnings growth is the annual rate of growth of earnings from investments.

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Earnings per share

Earnings per share (EPS) is the monetary value of earnings per outstanding share of common stock for a company.

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Exponential growth

Exponential growth is exhibited when the rate of change—the change per instant or unit of time—of the value of a mathematical function is proportional to the function's current value, resulting in its value at any time being an exponential function of time, i.e., a function in which the time value is the exponent.

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Finance

Finance is a field that is concerned with the allocation (investment) of assets and liabilities (known as elements of the balance statement) over space and time, often under conditions of risk or uncertainty.

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Future value

Future value is the value of an asset at a specific date.

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Geometric series

In mathematics, a geometric series is a series with a constant ratio between successive terms.

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Green's function

In mathematics, a Green's function is the impulse response of an inhomogeneous linear differential equation defined on a domain, with specified initial conditions or boundary conditions.

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Heaviside step function

The Heaviside step function, or the unit step function, usually denoted by or (but sometimes, or), is a discontinuous function named after Oliver Heaviside (1850–1925), whose value is zero for negative argument and one for positive argument.

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Hyperbolic discounting

In economics, hyperbolic discounting is a time-inconsistent model of delay discounting.

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Integral

In mathematics, an integral assigns numbers to functions in a way that can describe displacement, area, volume, and other concepts that arise by combining infinitesimal data.

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Interest

Interest is payment from a borrower or deposit-taking financial institution to a lender or depositor of an amount above repayment of the principal sum (i.e., the amount borrowed), at a particular rate.

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Interest rate

An interest rate is the amount of interest due per period, as a proportion of the amount lent, deposited or borrowed (called the principal sum).

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Internal rate of return

The internal rate of return (IRR) is a method of calculating rate of return.

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Investment

In general, to invest is to allocate money (or sometimes another resource, such as time) in the expectation of some benefit in the future – for example, investment in durable goods, in real estate by the service industry, in factories for manufacturing, in product development, and in research and development.

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Investor

An investor is a person that allocates capital with the expectation of a future financial return.

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Makkot

Makkot (Hebrew: מכות, "Lashes") is a book of the Mishnah and Talmud.

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Martín de Azpilcueta

Martín de Azpilcueta (Azpilikueta in Basque) (13 December 1491 – 1 June 1586), or Doctor Navarrus, was an important Spanish canonist and theologian in his time, and an early economist, the first to develop monetarist theory.

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Mathematical finance

Mathematical finance, also known as quantitative finance, is a field of applied mathematics, concerned with mathematical modeling of financial markets.

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Maturity (finance)

In finance, maturity or maturity date refers to the final payment date of a loan or other financial instrument, at which point the principal (and all remaining interest) is due to be paid.

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Natural logarithm

The natural logarithm of a number is its logarithm to the base of the mathematical constant ''e'', where e is an irrational and transcendental number approximately equal to.

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Net present value

In finance, the net present value (NPV) or net present worth (NPW) is a measurement of profit calculated by subtracting the present values (PV) of cash outflows (including initial cost) from the present values of cash inflows over a period of time.

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Option time value

In finance, the time value (TV) (extrinsic or instrumental value) of an option is the premium a rational investor would pay over its current exercise value (intrinsic value), based on the probability it will increase in value before expiry.

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Ordinary differential equation

In mathematics, an ordinary differential equation (ODE) is a differential equation containing one or more functions of one independent variable and its derivatives.

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Partial differential equation

In mathematics, a partial differential equation (PDE) is a differential equation that contains unknown multivariable functions and their partial derivatives.

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Perpetuity

A perpetuity is an annuity that has no end, or a stream of cash payments that continues forever.

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Present value

In economics and finance, present value (PV), also known as present discounted value, is the value of an expected income stream determined as of the date of valuation.

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Price–earnings ratio

The price/earnings ratio (often shortened to the P/E ratio or the PER) is the ratio of a company's stock price to the company's earnings per share.

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Rate of return

In finance, return is a profit on an investment.

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Real versus nominal value (economics)

In economics, a real value of a good or other entity has been adjusted for inflation, enabling comparison of quantities as if prices had not changed.

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Return of capital

Return of capital (ROC) refers to principal payments back to "capital owners" (shareholders, partners, unitholders) that exceed the growth (net income/taxable income) of a business or investment.

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Rule of 72

In finance, the rule of 72, the rule of 70 and the rule of 69.3 are methods for estimating an investment's doubling time.

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School of Salamanca

The School of Salamanca (Escuela de Salamanca) is the Renaissance of thought in diverse intellectual areas by Spanish and Portuguese theologians, rooted in the intellectual and pedagogical work of Francisco de Vitoria.

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Spreadsheet

A spreadsheet is an interactive computer application for organization, analysis and storage of data in tabular form.

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Stock valuation

In financial markets, stock valuation is the method of calculating theoretical values of companies and their stocks.

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Talmud

The Talmud (Hebrew: תַּלְמוּד talmūd "instruction, learning", from a root LMD "teach, study") is the central text of Rabbinic Judaism and the primary source of Jewish religious law and theology.

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Time preference

In economics, time preference (or time discounting, delay discounting, temporal discounting) is the current relative valuation placed on receiving a good at an earlier date compared with receiving it at a later date.

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Cumulative Average Growth Rate, Cumulative average growth rate, Cumulative average return, Engineering economics formulas, Financial theory, Present future value, Present value of a future sum, Time Value of Money, Time-value of money.

References

[1] https://en.wikipedia.org/wiki/Time_value_of_money

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