Investopedia contributors come from a range of backgrounds, and over 25 years there have been thousands of expert writers and editors who have contributed. Amy is an ACA and the CEO and founder of ...

Too many financial decisions are made without factoring in the time value of money. Whether providing financial planning advice related to a client’s retirement, advising a client about a business ...

Net present value and the profitability index are helpful tools that allow investors and companies make decisions about where to allocate their money for the best return. Net present value tells us ...

Julia Kagan is a financial/consumer journalist and former senior editor, personal finance, of Investopedia. Dr. Melody Bell is a personal finance expert, entrepreneur, educator, and researcher. Melody ...

The basic premise of finance is that money has time value -- a dollar in hand today is worth more than a dollar in the future. The study of finance seeks to make it possible to compare the value of a ...

Here's how to calculate the present value of a perpetual annuity that promises to pay flat or growing annual payments with helpful examples. A perpetual annuity, also called a perpetuity, promises to ...

Calculate the present value of each year's cash flow by dividing by (1 + discount rate)^number of years. Sum all present values to find the total value of projected cash flows, which in this example ...