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From Financial Integrity

Understanding the time value of money

Investopedia offers a useful primer on "future value," how money grows when invested over time, including a simple method to help you calculate the time value of money.

Starting with the question "If you could have $10,000 today or $10,000 three years from now, which would you choose?", Investopedia walks you through why it's advantageous to do what seems most logical and take - but not spend - the money now. The power of investment becomes clear. Don't get bogged down in the explanation of how the formula is derived, because the final formula will work for you even if you had trouble following the steps in how it develops.

Go here for "Understanding the Time Value of Money."


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