The time value of money states that the value of money received today is greater than the same amount received in the future due to interest. There are formulas to calculate the future value of a single payment or a series of payments by compounding interest over time. Interest can be compounded annually, quarterly, or semi-annually, with more frequent compounding yielding higher future values. An annuity is a series of equal payments over a period of time, and its future value can be calculated using annuity compound interest factors.