The Time Value of Money (textbook)

The Time Value of Money (TVM) is the financial concept that a dollar today is worth more than a dollar in the future. This is due to its potential earning capacity; if you have money now, you can invest it to earn interest. Conversely, money received in the future may lose value due to inflation and lost investment opportunities. Understanding TVM helps individuals make informed decisions about savings, investments, and loans, highlighting the importance of time in financial planning and the impact of interest rates on money's future value.