Summary: Time Value of Money
The concept of compounding is deeply embedded in our everyday life, and this calls for our attention to understand the basics of time value of money. Important to note, the concept of time Value of Money asserts that value of a dollar received today is more than the same amount of dollar received at a future date. Stated simply, a dollar today cane invested in a return generating asset, and at future period, the investor will get additional interest on the money invested. Stated below are some of the reasons as why money has time value: a)Risk and ...
