Submitted by kamal2201 on November 6, 2007

• Category: Business
• Words: 1297
• Pages: 6
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• Popularity Rank: 634

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Yield To Maturity

The idea that money available at the present time is worth more than the same

amount in the future, due to its potential earning capacity. This core principle of finance

holds that, provided money can earn interest, any amount of money is worth more the

sooner it is received. Also referred to as "present discounted value".

Everyone knows that money deposited in a savings account will earn interest.

Because of this universal fact, we would prefer to receive money today rather than the

same amount in the future. For example, assuming a 5% interest rate, $100 invested

today will be...

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