How does Time value of money associated with commerical bank?© BrainMass Inc. brainmass.com March 4, 2021, 7:12 pm ad1c9bdddf
Time value of Money
This concept is used by commercial banks to judge the financial position of its clients. If the clients projects are having positive Net present value then it grants the loan to them.
Net present value concept is based on time value of money.
To find out the present value of any investments:
Present value is the future value being discounted by an appropriated capitalization rate. The value of sum of money received today is more than its value received after some time.
In other words ...
This discusses the time value of money associated with commercial bank.