Time Value of Money: The value of the money changes with the change in time. If an individual deposits his savings in the bank then, the amount will increase at the specified interest rate. But if he invests that same amount in different avenues then he may get loss or more profit. Future Value: The future value is that value of an investment which will be realizable in future. When amount is invested today at a specific rate, its future value will be more than the present value of money invested. To identify: The value of cash which would proceed at the time of liquidation.

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Chapter B, Problem 5E

To determine

Time Value of Money:

The value of the money changes with the change in time. If an individual deposits his savings in the bank then, the amount will increase at the specified interest rate. But if he invests that same amount in different avenues then he may get loss or more profit.

Future Value:

The future value is that value of an investment which will be realizable in future. When amount is invested today at a specific rate, its future value will be more than the present value of money invested.

To identify: The value of cash which would proceed at the time of liquidation.

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