An even cash flow of regularly scheduled payments defines an annuity. If you borrow money to start your business, the monthly payments are calculated using an annuity formula. Two basic annuity ...

Net present value (NPV) represents the difference between the present value of cash inflows and outflows over a set time period. Knowing how to calculate net present value can be useful when choosing ...

Present value (PV) is an accounting term meaning the value today of some amount of money expected to be available one or more years in the future. The concept behind this is that money available in ...

Discover what makes unconventional cash flows unique, explore challenges in capital budgeting, and learn how multiple IRRs affect investment decisions.

Chris Gallant, CFA, is a senior manager of interest rate risk for ATB Financial with 10 years of experience in the financial markets. Suzanne is a content marketer, writer, and fact-checker. She holds ...

A perpetuity in finance is a stream of payments or cash flows that is presumed to extend indefinitely into the future. Learn the importance of perpetuities, with the help of examples of investments. A ...

The internal rate of return, or IRR, is the interest rate that provides a net present value, or NPV, of future cash flows equal to the initial investment amount. Flip that definition around, and the ...

In the world of finance, an annuity is a contract between you and a life insurance company in which you give the company a lump sum or series of payments, and in return, the insurer promises to ...