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The Time Value Of Money

 Over the Years, the Economy has been changing, evolving, and sometimes abruptly taking Unexpected courses. This has forced Humans to think of a better and safer investment platform, where an amount invested is never lost but grows.

Today we will be talking about the Time value of money, most of the BCOM or Commerce students have already got the whole idea of this blog. In This generation, money is not only the sole currency but also the Time, if both are intertwined together then it gives the holistic view of the wealth.

A sum invested in the bank will yield some positive return in the future but what if the value of money at that point in the future is the same as when invested!

For Example, Bruce Wayne Invested 1000$ in the bank and at that time house cost 1000$, a car cost 400$, but 10 years later that 1000$ is now 1100$ in the bank but house prices have soared to 1100$ and car too cost now 500$, so my question is was it worth investing in the bank and waiting for 10 years? What is the Time Value of money?

The answer to this Dilemma is simple but riskier and looks more tanalizing than your fixed deposits or bond. There are multiple sets of investment alternatives from trading, deliveries, mutual fund, Gold Bonds, Bonds, Real Estate, gold, etc. But they can answer your dilemma only when we understand the science behind it.

TIME VALUE OF MONEY



Time value of money means that a sum of money is worth more now than the same sum of money in the future. This is because money can grow only through investing. An investment delayed is an opportunity lost. The formula for computing the time value of money considers the amount of money, its future value, the amount it can earn, and the time frame. But what concerns us is that is the Rate of interest earned over investment and its correlation with the rate of inflation.

 So in layman's terms what we earn overtime should be greater than what we can spend over time. Now, this is not going to be forever true, but the real effort of investment is touching this sweet spot again and again till you reach the goal.

THE MAIN PURPOSE OF MY BLOG IS NOT TO BE DESCRIPTIVE BUT ENLIGHTENING

 







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Comments

  1. Sudeshna Surywanshi15 June 2022 at 01:54

    The time value of money is the amount of money that you could earn between today and the time of a future payment.ITC share price

    ReplyDelete
  2. Rohitatwork15 June 2022 at 23:38

    very informative post very helpul and explained in very easy language, really looking forward to more of your post
    Broker for stocks

    ReplyDelete
  3. Anonymous18 July 2022 at 01:28

    true

    ReplyDelete
  4. Rohitatwork22 July 2022 at 02:21

    nice blog Narnolia

    ReplyDelete
  5. Rohitatwork23 July 2022 at 02:22

    nice blog Narnolia

    ReplyDelete

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