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Time value of money can be interpreted in mathematical calculation, which solves one of several variables in a financial problems, a typical example of variable would be a balance (the mentioned facts in a balance are the real and nominal value of a debt or a financial asset in terms of monetary units), a periodic rate of interest, the period numbers and a series of cash flows.
In other words, Time value of money is the calculative idea which tells that the present money is more worthy than the same amount in the future due depending on the potential of its earning capacity. Finance carries the core concept that provides the idea that provided money can interest, any amount of money is worth more the sooner it is received.
Foundations and Applications of the Time Value of Money By Pamela Peterson Drake, Frank J. Fabozzi (published by John Wiley & Sons, 2009)
Using Financial Calculators for Time Value of Money Calculations By Johan Marx (published by Pearson South Africa, 2009)
Here are a few of practical examples, with which the notion of Time value of money can be clarified, here are two of examples are discussed below,
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