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Briefly discuss the Time Value of Money concept? (no copy )

Briefly discuss the Time Value of Money concept? (no copy )

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Time value of money means that the value of $1 today is more than the value of $1 tomorrow. The logic behind this is that if you have $1 today then you can either consume it or invest it at certain rate and can earn return on that. Time value of money concept is one of the most important concepts in the world of finance.

For example, let’s say you have $100 today, now if someone wants to borrow that amount from you then you would want him to compensate for delaying your consumption or provide a return that is equivalent to what he could have earned by investing it somewhere.

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