TOOLS
Time Value of Money
Understanding how money today compares to money in the future — the foundation beneath every capitalisation rate, discounted cash flow, and investment decision in property valuation.
Why It Matters in Valuation
A rand received today is worth more than a rand received in five years, because today’s rand can be invested and grow. Every income-approach method — capitalisation, discounted cash flow, profit method — rests on this single idea. Getting the time value of money right is what separates a defensible valuation from a guess.
Present Value (PV)
What a future amount of money is worth today, discounted back at an appropriate rate. Used to convert future rental income or a future sale price into a value today.
Future Value (FV)
What a sum invested today will grow to by a future date, given a rate of return. Used to project growth in rentals, costs, or capital value over a holding period.
Discount Rate
The rate used to convert future cash flows into present value, reflecting risk, inflation, and the return investors require from a similar asset.
Calculators
Use these tools to work through present value, future value, DCF, loan repayment and annuity calculations.
Result
Result
Monthly Payment
Result
Educational tool only. These calculators are provided for illustrative and learning purposes and do not constitute financial, investment, or valuation advice. Always verify results independently and apply professional judgement before relying on them in practice.
Where This Shows Up
You will apply time value of money directly in the Income Capitalisation Method and the Discounted Cash Flow Method — both covered in Valuation Approaches & Methods — as well as in development appraisals using the Land Residual Method.
Put It Into Practice
See how present value and discount rates are applied step by step in the income approach.