Present Value, Net Present Value and Future Value

Money today is not the same as money tomorrow — a rupee received now can be invested to earn more, so its value is greater than a rupee received later. This section introduces the core ideas that let you compare money across time: present value (what a future sum is worth today), future value (what today’s sum will grow to), and net present value (the difference that tells you whether an investment is worthwhile). These three concepts are the foundatio …