While taking a loan or mortgage, the amount you have to return including interest is calculated by a lender through the principles of TVM. Thus, the lender gets the money back so that he can lend the same to you again as the money paid back with interest possesses time and risk.

While taking a loan or mortgage, the amount you have to return including interest is calculated by a lender through the principles of TVM. Thus, the lender gets the money back so that he can lend the same to you again as the money paid back with interest possesses time and risk.