TVM
Business & Finance abbreviation · Finance
| Stands for | Time value of money |
|---|---|
| Categories | Business & Finance |
TVM stands for Time value of money, a finance abbreviation.
Principle that a sum of money is worth more today than the same sum in the future, because money available now can be invested to earn a return. It is the basis of discounting, compounding, loan amortization and nearly all valuation.
Example: TVM tables show that $1,000 invested at 5 percent grows to about $1,629 in ten years.
Usage notes
The core variables are present value, future value, interest rate, number of periods and payment, and financial calculators such as the HP 12C and TI BA II Plus have dedicated TVM keys. Inflation, opportunity cost and risk all help explain why money now is preferred to money later.
Related abbreviations
More finance abbreviations
- ABL – Asset-based lending
- APA – Asset purchase agreement
- APV – Adjusted present value
- ARR – Annual recurring revenue
- ATM – At-the-market offering
- AUM – Assets under management
- CAGR – Compound annual growth rate
- CapEx – Capital expenditure
- CAPM – Capital asset pricing model
- CCC – Cash conversion cycle
- CIM – Confidential information memorandum
- CVC – Corporate venture capital