Below is a list of definitions that are essential to understand for time value of money questions.

• Present Value (PV) – The amount of capital invested today is called the present value.
• Time Period (n) – The time the capital is invested is split into time periods and the number of
  time periods is denoted by n.
• Interest Rate (r) – The amount paid on the investment – quoted as a percentage.
• Future Value (FV) – The accumulated value of the capital at the end of the term.