In: Accounting
What is time value of money and also describe the meaning of annnuity
Step-by-Step Solution
Step 1: Definition of the time value of money
The invested cash that earns interest over time is called the time value of money.
Step 2: Annuity
The annuity is a series of equal cash payments in a similar period. In the annuity, the investor makes an equal cash payment in a similar period
The rate of return means the percentage of the amount received from the investment.