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What two types of time-value-of-money calculations are used to account for the time value money from...

What two types of time-value-of-money calculations are used to account for the time value money from interest earned?

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Answer #1

Two types of calculation for accounting time value of money from interest earned are Present Value and Future Value of Interest paying amount.Present value discounts all the principal and interest earned to present value whereas Future compounds the amount and interest to future value.

PV = Amount/(1+r)n where r = Rate , N is number of periods
FV = Amount*(1+r)nwhere r = Rate , N is number of periods

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