The Time Value of Money The time value of money is the notion that a dollar today is worth more than a dollar tomorrow P×(1+r)=F where P= present value (i.e. price today) F= future value r= interest rate per period and n number of periods Strong C2-Understanding Risk and Return 2-82 - 8 Strong C2 – Understanding Risk and Return P × ( 1 + r )n = F where P = present value (i.e. price today) F = future value r = interest rate per period and n = number of periods The Time Value of Money  The time value of money is the notion that a dollar today is worth more than a dollar tomorrow