BACHELOR OF BUSINESS ADMINISTRATION

Detailed explanation-1: -The passing of time actually reduces the value of money due to inflation. The opportunity cost of money, not its elimination, is the primary reason for the time value of money. Spending money (by investing it) is better than hoarding it as it results in a positive return.

Detailed explanation-2: -Inflation is the general increase in prices, which means that the value of money depreciates over time as a result of that change in the general level of prices. A dollar in the future will not be able to buy the same value of goods as it does today. Changes in the price level are reflected in the interest rate.

Detailed explanation-3: -The time value of money means that a sum of money is worth more now than the same sum of money in the future. The principle of the time value of money means that it can grow only through investing so a delayed investment is a lost opportunity.

Detailed explanation-4: -In general, the value of money decreases over time. This means that $5 today won’t buy you the same amount of goods or services as it would in 10 years. Our tool shows both the history of actual inflation and a projection of future inflation.