Question

FIN3400

What do you think the speaker in the Concepts in Action video you watched this week meant when he mentioned that he talked about the time value of money with his managers? Can you think of an example in your own work history or something you've read about where the time value of money might be relevant?

Answer 1

Answer:

The time value of cash is the possibility that, in view of its latent or potential earning capacity procuring limit, the sum accessible today is worth more for the future than a similar sum if cash can earn interesr. This center account rule expresses that as long as cash can gain interest, any measure of cash is esteemed all the more rapidly.

At the point when the speaker conversed with his supervisors about cash's time value, it implied that a dollar can be spent today on different chances to get interest, prompting an expansion in dollar value. A dollar today is in this manner worth in excess of a dollar later on. The value of the time of cash/money is a significant idea for financial specialists in light of the fact that the dollar on hand is worth more than the dollar it will promise in future . To be sure, a dollar promised later on is worth not exactly a inflation dollar today.

There are various instances of cash/money time around us. The investments we make with our banks are one regular model. Now and then we put a specific sum in an investment account on the bank and the group pays us the increase on our accessible equalization (regularly for a period we can't withdraw). In the event that we don't resign the markup and principal sum we have contributed, we will clearly get more than we have contributed before the finish of the investment time frame.