Time value of money - Time value of money shows the...

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Unformatted text preview: Time value of money shows the relation of value of money with time . Time value of money is also value of interest which we have earned for giving money to other for specific period. Value of Rs. 1 which you have today is more valuable than what Rs. 1 you will receive after one year because you can invest today receive Rs. 1 in any scheme and you can earn minimum interest on it. It means today received money is important than tomorrow receivable money. Time value of money is very helpful technique for taking investment decisions. We accept that proposal first which will return our money fasty than any other project. We can also calculate value of today earned money if we invest it in specific period on the basis of interest rate. Example which shows the time value of money: Today we receive Rs. 100 and invest it in saving account of bank and After one year we will receive Rs. 103.50. Rs. 3.50 is the time value of Today we receive Rs....
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This note was uploaded on 10/19/2011 for the course FINANCE 302 taught by Professor Staff during the Fall '10 term at East West University, Chicago.

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Time value of money - Time value of money shows the...

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