Question

Explain Time value Of money ?​

Answer 1

Explanation:

The time value of money is the greater benefit of receiving money now rather than an identical sum later. It is founded on time preference.

The time value of money explains why interest is paid or earned: interest, whether it is on a bank deposit or debt, compensates the depositor or lender for the time value of money.

It also underlies investment. Investors are willing to forgo spending their money now only if they expect a favorable return on their investment in the future, such that the increased value to be available later is sufficiently high to offset the preference to have money now; see required rate of return.

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Answer 2

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