What is the importance of time value of money for investors, business people and individuals?

[Suba]

We often interpret time as money, so the value of the money we have now is more valuable than the value in the future. For example, if we have $100 worth of money, it will be worth more than $100 next year because of the decline in the value of money due to inflation. Investors and business people must be able to know how to calculate the time value of money to predict the returns that will be obtained, especially by paying attention to interest rates and capital gains factors. So in principle, for investors, business people or individuals, whatever the value of money (USD) is, the more valuable it is the sooner we receive it. So the basis of the time value of money refers to cateris paribus, so we are better off having money now than later.

 

[SHAHID987]

Money usually devalued with time. This is the reason due to which, I always support investment as compare to saving.

 

[Fidelia]

Time value of money examines how much the investment amount would be worth in the future. That's because inflation is sure to happen regardless.

 

[kerryjoy]

The time value of money asserts that money received today holds greater worth than the same amount received in the future due to inflation and potential investment opportunities. Understanding this concept is crucial for investors and businesses to accurately predict returns and make informed financial decisions.

 

[Augusta]

That's right money gets devalued with time. So it is the best to invest in profit yielding investment. it would be helpful for every one

Money usually devalued with time. This is the reason due to which, I always support investment as compare to saving.

y