# Business Finance- time value of money

### 12 terms by maxfjord

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### Intrinsic value

Has worth independent of any benefit it may provide to humans

### Time value of money

the principle that a dollar received today is worth more than a dollar received in the future

### Future value

What an amount invested today at a particular interest rate will be worth in the future

### Simple interest

interest paid on the principal alone , I=prt

### Compound interest

interest earned on both the principal amount and any interest already earned

### Discounting

The act of finding the present value of future cash flows.

### Discount rate

the rate used to calculate the present value of future cash flows

### Discount rate formula

FV = PV x 1/(1+i)

a negative value

a positive value

### Rule 72

Approximation of how long it will take to double a sum at a given interest rate. (72/annual compound interest rate)

### TDM

Time needed to double your money
See rule 72

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