Time Value of Money Intro 
Key:  
Definitions: 
Present Value –  
Value of a cash flow today; the amount you would accept today in place of a future cash flow.
Future Value –  
Value of money at a future date after earning interest/return.
One-time payment ($1) – 
A single cash flow occurring once (not a series of equal payments).
Annuity payment –  
A series of equal payments made at regular intervals.
Types of Cash Flow Problems 
Present Value of a $1   
Discounts one future cash flow back to today.
Present Value of an annuity  
Discounts a series of equal future payments back to today.
Future Value of a $1  
Compounds one current cash flow forward to a future date.
Future Value of an annuity  
Compounds a series of equal payments forward to a future date.