How does time affect the value of money?

Intermediate Financial Management (MindTap Course List)
13th Edition
ISBN:9781337395083
Author:Eugene F. Brigham, Phillip R. Daves
Publisher:Eugene F. Brigham, Phillip R. Daves
Chapter1: An Overview Of Financial Management And The Financial Environment
Section: Chapter Questions
Problem 11MC: What are some economic conditions that affect the cost of money?
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How does time affect the value of money?

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Step 1: Definition

Time value of money:

Time value of money refers to the concept that the value of money available at present worth’s more in the future due to its potential earning capacity.

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