PV, FV, Annuities, NPV & IRR

Understand why a dollar today is worth more than a dollar tomorrow. Master every TVM concept from simple interest to IRR with clear formulas, real-world examples, and AI-powered practice.

Theory is free — no sign-in required

Theory topics

800+

Exercises

Difficulty levels

The Time Value of Money (TVM) is a core principle in finance and accounting: a dollar received today is worth more than a dollar received in the future. Why? Because money available now can be invested to earn a return.

The Core Idea

Interest is the price of money. It compensates lenders for the time they give up and compensates investors for deferring consumption. Because of interest, a dollar today grows into more than a dollar tomorrow.

Real-world applications:

Loan amortization — how bank payments split between interest and principal
Bond pricing — present value of future coupon payments and face value
Capital budgeting — NPV and IRR for investment decisions
Lease accounting — present value of future lease payments
Retirement planning — future value of regular contributions