Calculation of time value of money:

Calculation of simple interest: The principal earns interest during the loan period. No matter how long the time is, the interest earned will not be added to the principal for repeated calculation of interest.

P—principal, also known as the beginning amount or present value;

I—interest;

i—interest rate, usually refers to the annual interest and principal Ratio;

F—the sum of principal and interest, also known as the sum of principal and interest or future value;

t(n)—time (the number of periods for calculating interest).

Simple interest interest calculation: I=P*i*t;

Future value calculation: F=P+P×i×t;

Present value Calculation: P=F/(1+i*t);

Compound interest calculation: after each interest calculation period, the interest generated is added to the principal and then the interest is calculated, and the calculation is rolled over period by period, commonly known as " Profits compound profits."

Compound interest terminal value: F=P(1+i)^n;

Among them (1+i)^n is called the compound interest terminal value coefficient or the compound interest terminal value of 1 yuan. Value, represented by the symbol (F/P,i,n).

The present value of compound interest: P=F(1+i)^-n;

Among them (1+i)^_n is called the present value coefficient of compound interest, or 1 yuan The present value of compound interest is represented by (P/F,i,n).

The time value of money refers to the increased value of money through investment and reinvestment over a certain period of time, also known as the time value of money.