Explaining the basics of present and future value of money
In this video, we dive into the essential concepts of time value of money, focusing on present value and future value. Through an engaging example, we compare two investment options: receiving $500K today versus $1 million in eight years. We explore how the interest rate affects these decisions, discussing opportunity costs and using financial formulas to determine which option is more valuable. By understanding how to calculate future and present values, you'll gain insights into key financial principles that shape investment decisions.
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Time Value of Money Explained for Finance Students
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