The value of money that figures given amount of interest earned over given amount of time is known as time value of money. It evaluates the stream of income in future. Some standard calculations based on time value of money are:
• Present value is current worth of future sum of money given at specified rate of return.
• Present value of an annuity series of equal payments that occurs in evenly spaced intervals. E.g. leases and rental payments.
• Present value of a perpetuity constant and infinite stream of even cash flow.
• Future value is the value specified at future that is equivalent to a value specified sum today.




