What is the 'time value of money'? Definition & meaning

More terms

Real Estate Investment Trust (REIT)

An investment trust specialised in investing in commercial property such as parking garages or GP offices.

index-linked gilts

Gilts where the dividends and principal repayments are related to movements in the Retail Prices Index (RPI). This is as opposed to a conventional gilt, where the dividends and principal repayments are fixed in nominal terms.

Annualised Rate of Return

The average annual return an investor sees over a set period of time.

Oligopoly

A situation in which a market or industry is controlled by a small group of companies.

LSE

London Stock Exchange, which was founded in 1571 and now has a market cap of almost $5 trillion.

Time-Weighted Rate of Return (TWRR)

A return calculated over the time period invested, that excludes extraneous elements, such as deposits to and withdrawals from the investment accounted.

Hypothesis Testing

A mathematical test used to determine whether a claim is true or false.

Accrued interest

The interest earned on a gilt since the last dividend date. When buying a gilt, the buyer pays the accrued interest at the time of a transaction to the seller in addition to the clean price of the gilt

Maturity value

What's the maturity value of a bond?

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Time Value of Money