Now we have mean from present value and I'm sure by now you must be clear on time value means that the money in absolute terms may look good in when we are going into the future. But in terms of the percentages in terms of its value, the money or the dollar will will lose its value over the period of time. What you could buy today from hundred dollar bill you will not able to buy the same for five years or 10 years or 15 years. Same is the case what you used to able to buy in your universities and schools and colleges in maybe your parents from the hundred dollar bill is drastically. A larger value I mean in terms of items in terms of the value in terms of the return on hundred dollar bills when they go to the restaurant. And everything else is pay more than what we could do today.

So, this is the case when we are talking about the net present value, the This means a total benefits income or revenue is less the cost or net present. So, net is whatever you are getting in terms of total benefits minus the cost is the net net present value over the period of time. So, you could see the formula that we have to see every year that how much we are getting back for year one, income and revenue is zero, present value at 10% interest rate is zero. So, the cost that you have incurred is 200. And the present value of cost is 200. We go in the year in year one, the income is 50 the present value of 10% because we have agreed that the discounted cash flow or discounted rate or the interest rate or add the value or at the rate at which the dollar bill or the money is losing the value is 10% the cost we have in invested another hundred dollar bill and the return is 91 present value the cost of 10% at the return So, 91 you have invested because you are standing today we need to know that what we will be investing after one year after two year and after three year and what we will be getting today after one year and after two year investment return of 50 103 hundred is 45 ADC and 225 the cost of 200 and 191 zero and zero.

So, the total return in terms of return is 353 and 291. So, the return is 62% you have to take every every year as an independent value. So that you know Do whatever you have, because whenever you will invest the return will be yearly or monthly or quarterly or you may want to add and that is why you want to add more and more value into it, you will be actually calculating every year independent when you were doing a present value, you are actually saying I have invested hundred dollars today, after five years I have got 125 back and the discounted cash flow discounted date or interest rate is 5%. So, what is the total what is the amount that I am what is the value 125 is I'm getting to So, this is these are the two different concepts was just present value and other is net present value where every year has to be calculated independently and then needs to be some so that you can identify what is the profit or the loss that you are actually creating.

So the return is 253 And the investment is 291 which is 62. But if you see in terms of absolute value, your investment is 300 and your return is 450 which is actually 150. You would get back in terms of absolute value but with the 10% loss of value of $1 or a one unit price of an amount, the actual return is only $62 or whatever the currency you want to you want to use in terms of dollars. Thank you very much. Let us see some other benefit management scoring models in the next in the next