Time value of money is calculated by measuring costs of periods of time based on the net costs incurred during that period. This method is used to establish a real cost base for business operations and a general basis for quotes for services. The process is sometimes a debatable measure of cost in terms of describing costs of operations when these costs are normal costs, regardless of operational conditions.
Examples of Time Value of Money:
Period of time: 5 hours
Cost of staff = $500 per hour $2500
Cost of office space = $20 per hour $100
Cost of equipment usage = $80 per hour $400
Cost of consultant per hour = $85 per hour $ 425
Net time value of money $3425http://people.hofstra.edu/stefan_waner/realworld/tmvcalc.html
Exponential growth of compound interest.