What are the basic concepts of time value of money?


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Basic Concepts

(a)    Present Value : A present value is the discounted value of one or more future cash flow.

(b)   Future Value : A future value is the compounded value of a present value.

(c)    Discount factor : The discount factor is the present value of a rupee received in the future.

(d)   Compounding Factor : The compounding factor is the future value of a rupee.


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