TIME VALUE OF MONEY

This query is : Resolved 

19 August 2008


WHAT IS THE MEANING OF TIME VALUE OF MONEY?

19 August 2008 GIVE ANY EXAMPLE OF IT.

19 August 2008 REPLY AS EARLY AS POSSIBLE


19 August 2008 Mr. Vishnuagarwal,
Go through this small example.
Your dad, in his childhood could have watched a movie for 50 paise or a rupee. But now u can get only a candy for 50 paise. This is time value of money. As years go, the value of money will decrease, in proportion to the inflation rate. If u discount the cashflows with the discounting factor, ie inflation rate, u will get present value of money.

19 August 2008
thanx

19 August 2008

thanx for replying



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