[Verse 1] Sarah finds a thousand dollars buried in her yard Dreams of what it's worth ten years from now Compound interest whispers secrets in her ear Present value shows her how At five percent her money doubles every fourteen years Future value grows like magic in the ground But flip the formula and work it backward through the years Present value brings it down [Chorus] Time is money, money grows through time Present value, future value, draw the line Annuities keep flowing, payments in a row Perpetuities forever, watch your money grow PV equals FV divided by one plus r to the n Time value teaches you to understand when [Verse 2] Monthly rent payments stretch out like a chain Annuity ordinary, payments at the end But if you pay up front, annuity due's the game Extra interest you can spend A scholarship forever, that's perpetuity's call Divide the payment by the rate and you're done But add some growth each year and watch the value crawl Growing perpetuity's begun [Chorus] Time is money, money grows through time Present value, future value, draw the line Annuities keep flowing, payments in a row Perpetuities forever, watch your money grow PV equals FV divided by one plus r to the n Time value teaches you to understand when [Bridge] Uneven cash flows need a different approach NPV adds up each discounted piece IRR finds the rate that makes NPV zero, no reproach Internal rate gives you peace Stated rate's the poster on the bank's front door But effective annual rate tells the truth Compounding frequency opens up the secret drawer Continuous compounding's proof [Final Chorus] Time is money, money grows through time Present value, future value, draw the line EAR shows the real rate when compounding's in play Continuous means e to the power each day Master these formulas and you'll always know How time makes money grow [Outro] From single sums to complex streams Financial math reveals the schemes Time value makes the future clear Discount back or compound here
← Ethical Decision-Making Framework | Statistics and Probability →