Financial literacy education for the modern era.
Time Value of Money
The principle that money available today is worth more than the same amount in the future due to its potential earning capacity.
Adjust the Variables
Starting with $1,000 today
$1,000 today will be worth this much in 10 years at 7% return
You would need this much today to have $1,000 in 10 years at 7%
The Core Insight
Today
Can be invested
In 10 Years
Has less buying power
Due to opportunity cost and inflation, a dollar today is always worth more than a dollar tomorrow.
Future Value (FV)
FV = PV × (1 + r)^nWhat an investment will be worth at a future date. Shows the power of compound growth.
Present Value (PV)
PV = FV / (1 + r)^nWhat a future sum is worth today. Used to compare investments with different time horizons.
Discount Rate
r = required returnThe rate used to 'discount' future cash flows. Higher rates mean future money is worth less today.
Opportunity Cost
Cost = Best AlternativeThe return you give up by choosing one investment over another. Core reason for TVM.
Real-World Applications
Retirement Planning
Calculate how much to save today for future retirement needs
Investment Analysis
Compare projects with different cash flow timings
Loan Decisions
Understand the true cost of borrowing over time