Money in future is worth less than similar money today...
Can anyone explain above statement through financial tables?
FV of Rs 1 @ 1℅ at year end 1.010
means PV is 1 (value of money at present) and then add interest 1℅
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Time value of money
Replies (2)
You have only considered the interest appreciation. The combined effect will be with inflation rate, which reduces the purchasing power of money. For example check the Cost Inflation Index which was 100 for FY 2001-02, but 289 for FY 2019-20.
Thankyou so much sir... I understood.. I didn't consider Risk, uncertainty along with nflation rate factor...
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