Week 2 Discussion.HCA375.docx - Why is the concept of the"time value of money a very important financial concept both for organizations and for

Week 2 Discussion.HCA375.docx - Why is the concept of...

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Why is the concept of the "time value of money" a very important financial concept, both for organizations and for individuals? Give any example of how you might use the time value of money to make a personal decision. What exactly does time value of money mean? Money that you have can be invested in order to make more money for you in the future. The money that is earned from the interest is the time value of money (Woodruff, 2018). Time value of money is simply put as money decreases its worth over time (Blotnick, 1980). It looks at how money answers to price increases, compounding and changes in the rates of interest as well as how it is spread over incomes and insurance companies (Koco, 1999). So, in a sense the money you have in your pocket now is worth more now than it would be 2 years down the line. How I would use the time value of money to make a personal decision would be if I were given a large sum of money I would take that large amount and invent it in a way that it would bring me more money in the future. An example of this would be to place the money in a high
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