BUSINESS CODE: BCO212
BUSINESS COURSE: BUSINESS FINANCE 1
TIME VALUE OF MONEY.
Generally, there is a saying we are all familiar with, that time is money. Time value of money is a paramount financial concept, which means that a certain amount of money now is worth more the same amount in the future. This simply means that if we invest now, the resulting amount of money that will be earned will be much more than the one we invested.
Key reasons for difference in time value of money at different points of time
The key reason is the purchasing power and inflation. Inflation is the fluctuation of the value of money therefore, by decreasing the value of money the purchasing power increases and vice versa therefore inflation reduces the purchasing power of an individual.