The driving force of the majority of financial models is how much and when money is received or paid and this is due to the time value of money. $100 received today is worth more than $100 to be received in a year’s’ time. For one thing there is the opportunity cost of the lost interest on the money. There is also the additional risk associated with waiting for your money.
In this regard Excel has a number of functions that deal with the time value of money.
At a basic level you have the traditional functions relating to calculating the present and future value of money assuming some constant assumptions.
In the picture below you can see that given any four items of a calculation, you can use the specific Excel function to calculate the missing number.
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