A Car Costs 25,000 dollars. You can buy it for cash for 21000 (right now) or buy it over time with a down payment of 8000 dollars and pay the remaining 17000 over 72 months at 12% interest compounded monthly. This is a fixed schedule of payments which you can analyze and is fixed. if your time value of money is 10% would your present worth be better using the cash right now or the fixed schedule using the 10% TVOM.