Time value of money

Well here time is a very important resource. The sooner you understand the principles of TVM and use them in financial planning the more secure your retirement will be. Investment The investments you make now will grow in the future which can increase over time. For example if you put IDR million into a savings account with an annual interest rate of then you can have IDR in the following year. And the profits may continue to increase as time goes by.

However if you dont investsave

The money you could lose the opportunity Malta WhatsApp Number List to earn interest or a profit of IDR million for one year. This is closely relat to opportunity cost where the sooner you invest the greater the potential profit you can get. So when considering an investment it is important to evaluate the risks and rewards as some assets have more risk and volatility. Purchasing power Inflation is a condition where peoples purchasing power disappears over time. For example in the s if one liter of milk cost IDR and you want liters then you ne IDR to buy the milk.

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Then inflation caus

The average price per liter China Phone Number List of milk to increase to IDR after thirty years. So now you can only buy liters for the same amount of money. Bas on these trends your money will likely be worth more now than it will be in years. Banner klo Concept of Time Value of Money Time value of money concept TVM is an important basis in finance that describes how the value of money can change over time. The following are the main concepts that form the time value of money Present Value The first concept is Present Value PV which refers to the amount of money you have now that may increase in value in the future. This is because the money you have.

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