Question

Explain the time value of money and discuss techniques of time value of money

Answer 1

Answer:

The time value of money (TVM) is the concept that money available at thepresent time is worth more than the identical sum in the future due to its potential earning capacity. This core principle of finance holds that providedmoney can earn interest, any amount of money is worth more the sooner it is received.

Answer 2

Answer -

• Time value of money is the value which is earned over a given amount of time in terms of interest. For example if Rs. 200 money will be invested for about 1 year then the earning will be of 5% interest which will be worth 205 after one year.

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