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Accounting At Your Fingertips, 2e by George Murray, CPA.

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9.1 Time Value Basics

Understanding Time Value

Computing Interest

Annuities

The value of certain assets and liabilities depends on how long you hold them and at what price. This subchapter explains the time value of money concept and demonstrates the basics of computing interest and determining values for these accounts.

Time value of money is the concept that there’s a difference between $1 today and $1 sometime in the future.

Understanding Time Value

Most of us are comfortable with the concept that $1 today is worth more than $1 will be worth 5 years from now if you invest that $1 and presumably earn a return. Businesses must similarly consider the effects of timing and returns when valuing assets and liabilities. Investments, bond purchases, ...

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