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money has time value for the following reasons:
(1) present consumption preference.
(2) uncertainty.
(3) Interest rate.
(4) Inflation.
(5) Deflation.
(6) Gold price.
Wiki User
∙ 12y ago
Garry Rives
Money can be invested to earn a rate of return. It is better to have $100 now rather than in a year from now, because that $100 could be invested over that year and grow. Therefore we use the time value of money concept to adjust for this investment opportunity.
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What can erode the value of money over time?
Inflation can erode the value of money over time.
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
Who coined the phrase you have to spend money to make money?
Seems to be lost. But why worry about a false statement. Consider instead. Time is more value than money. You can get more money, but you cannot get more time.
Why does the value of money save increase over time?
because it earns intrest
A time of decline in general price levels of goods and services and the value of money is stronger?
Deflation is a decline in general price levels of goods and services and a stronger value in money.
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.
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 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.
How does Time Value of Money determine the valuation of bonds?
The Time Value of Money is a foundational principle in finance that states that money received today is worth more than the same amount received in the future due to its potential earning capacity. In the context of bond valuation, the Time Value of Money is used to calculate the present value of future cash flows generated by the bond, including interest payments and principal repayment. By discounting these future cash flows back to their present value using an appropriate discount rate (which accounts for the time value of money), the current price of the bond can be determined.
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
The concept of time value of money?
The concept of time value of money is used to compare the investment alternatives. The concept of money is also used to solve the problems that involves mortgages, leases and annuities.
If the 2-tailed value is .0001 then what is the significance level why?
if 0.01 significance value show ztab value to be 2.33 howw actually this is computed?
