# Finance: Time value of money concept.

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What is the time value of money (TVM)? Why is this concept important in accounting? Under what circumstances might we use TVM calculations?

When might we use present value calculations? When might we use future value calculations? Which is more likely to be used in accounting? Why?

What effect do interest rates have on the calculation of future and present value? How does the length of time affect future and present value? How do these two factors correlate?

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#### Solution Summary

The problem deals with discussing the time value of money concept.

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