This understanding will allow one to answer such questions as; how much should be invested today to produce a specified future sum of money? Time Value of Money In most cases, borrowing money is not free, unless it is a fiver for lunch from a friend. Interest is the cost of borrowing money. An interest rate is the cost stated as a percent. It can be used to compare investment alternatives and to solve problems involving loans, mortgages, leases, savings, and annuities. TVM is based on the concept that a dollar today is worth more than a dollar in the future.
Value of time this word is very significant for us especially students. Working time is very valuable for everyone. Time is the most valuable in our worldly life. The secret of success in life is the proper use of time.
Please join StudyMode to read the full document. Time Value of Money The time value of money is an important concept for both the corporation and private consumer alike. The "Introduction to Finance and Accounting" class opened my eyes to some new financial concepts, especially in the context of large firms with debt and equity mixes to manage. I think that the time value of money stands out because not only do I stand to personally gain from the knowledge that time is money , I can also extrapolate the concept to my professional life with regards to decisions on capital expenditures and financing terms on the receipt of goods and services. Personal I can personally use the time value of money concept in several ways.