Time value of money concepts

Question 1

Time Value of Money (TVM)

Answer 1

value of money changes over time, crucial for property economics & investment decisions

Question 2

assets of cash flows

Answer 2

can be viewed as a sequence of cash flows (property, stocks, bonds)

Question 3

future value

Answer 3

amount an investment is worth after a certain period, given a specific interest rate

Question 4

present value

Answer 4

current value of future amount, discounted at a particular rate

Question 5

compounding

Answer 5

calculating future value of a present amount

Question 6

discounting

Answer 6

process of determining present value of a future amount

Question 7

annuities & perpetuities

Answer 7

annuity is a series of fixed payments over a period. Perpetuity is an annuity that
lasts indefinitely