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suppose a company expects to get $100 one year from today. If it had that $100 now, it could invest the money--for example, earn interest from a bank--and have more than $100 next year. If the money earned 5 percent, the company would have $105 next year
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∙ 13y ago
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Time is money is an example of what?
Time is money is an example of when in time money is received. The present value of money can be different from its' future value; Interest, inflation, investments and if money will even be there in the future affects the future value of the sum. Also, opportunity cost, or the benefits given up to pursue a different option, can affect how much money is made and tells that person how his or her time can be better spent to earn the most amount of money in a certain amount of time, or how much money is lost when deciding to spend that same amount of time doing something else.
What does time value of money refer to?
The time value of money is the increase in, or future/prjected value of, an amount of money, due to the implied interest earned on it over a period of time.
What can erode the value of money over time?
Inflation can erode the value of money over time.
Example of money as a store of value?
making money at a garage sale and saving it
Concept of the time value of money?
Time value of money concepts dictates that amount recieved today is not equal to amount receivable at some future time and some amount sometimes interest which is the value of time involved with that money.
What is the difference between a commodity form of money and token money?
A commodity form of money is when the value of the money is determined by the intrinsic worth of what makes it. For example, if the money is salt (as was used by the Roman empire) then the value of the money is the same as the value of the same weight of salt in another form. A token form of money is when a form of money (for example a coin) is created that has little or no intrinsic value, but has value because a company or person has agreed to exchange the token for a good or service of value. One example is bus tokens - small coins that can be presented on buses in exchange for transportation.
What circumstance would the time value of money be irrelevant?
The time value of money is irrelevant to purchases paid in full. Money's time value is related to how long it takes to pay off a mortgage or a credit card.
What time value of money applications are used by commercial banks?
Time, is Money
Disadvantages of time value of money?
The disadvantages of time value of money are not knowing the interest rates or growth projections of money. It is impossible to forecast accurately inflation rates.
What is a sentence with time value of money?
www.grb.net
What is the value of time converted to money?
There is no specific value. Wasting time or using it inefficiently can cost money, but the amount depends on the type and size of the operation.
What are the financial applications of the time value of money?
(a) list various financial applications of the time value of money (b) Explain the components of a discount/ interest rate
