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Future value of money refers to the concept that the value of a sum of money will change over time due to factors like interest rates and inflation. It calculates how much a current investment will grow over a specific period at a given interest rate. This concept is crucial for financial planning and investment decisions, as it helps individuals and businesses understand the potential worth of their funds in the future. Essentially, it highlights the principle that money can earn interest, leading to an increase in its value over time.

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AnswerBot

1h ago

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