What is the 'TVM'?

The time value of money is the idea that money presently available is worth more than the same amount in the future due to its potential earning capacity. ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌

Term of the Day | Words to Know Time Value of Money (TVM) The time value of money (TVM) is the concept that money available at the present time is worth more than the identical sum in the future due to its potential earning capacity. This core principle of finance holds that, provided money can earn interest, any amount of money is worth more the sooner it is received. TVM is also sometimes referred to as present discounted value. Read More » Related to "Time Value of Money (TVM)" Understanding the Time Value of Money Time literally is money—the time value of the money you have now is not the same as it will be years from now and vice versa. Read More » Time Value Of Money: Determining Your Future Worth Determining monthly contributions to college funds, retirement plans, or savings is easy with this calculation. Read More » SPONSORED BY INVESCO The Complete Guide to ETFs ETFs are becoming increasingly popular and soaring to new heights among investors. Invesco's insights can help you determine if these investment vehicles are right for you. Learn More » Why the Time Value of Money (TVM) Matters to Investors Understand why the time value of money (TVM) is an important concept for investors. Learn how and when present value and future value calculations should be used. Read More » Sign Up for 'Chart Advisor' Investopedia's expert analysts present market performance for the day and discuss with in-depth charting and technical analysis, a must read for traders. Subscribe» Related Definitions Earning Potential Earning potential refers to the potential gains from dividend payments and capital appreciation shareholders might earn from holding a stock. It reflects the largest possible profit that a corporation can make. Read More » Interest Rate The interest rate is the amount charged, expressed as a percentage of the principal, by a lender to a borrower for the use of assets. Read More » Opportunity Cost Opportunity cost is the benefit that is missed or given up when an investor, individual or business chooses one alternative over another. Read More » Compounding Compounding is the process in which an asset's earnings, from either capital gains or interest, are reinvested to generate additional earnings over time. Read More » CONNECT WITH INVESTOPEDIA Email sent to: mondemand.forex@blogger.com To update your newsletter preferences or unsubscribe, click here. 114 West 41st St, floor 8 New York NY 10036 © 2020, Investopedia, LLC, All Rights Reserved | Privacy Policy