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Published by: Centre for Islamic Banking and Finance
Published in: 2001
Length: 12 pages
Data source: Generalised experience

Abstract

Time value of money is a critical consideration in understanding the valuation of financial assets. For example, compound interest calculations are needed to determine future sums of money resulting from an investment. Discounting, or the calculation of present value, which is inversely related to compounding, is used to evaluate the cash flow associated with the valuation of financial assets.

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Abstract

Time value of money is a critical consideration in understanding the valuation of financial assets. For example, compound interest calculations are needed to determine future sums of money resulting from an investment. Discounting, or the calculation of present value, which is inversely related to compounding, is used to evaluate the cash flow associated with the valuation of financial assets.

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