Importance of time value of money to individuals
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1. Why is the time value of money important for an individual to understand in regard to their private life? What can an individual do with this information?
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Solution Summary
Your discussion is 317 words and gives many examples of how the time value of money impacts individual in handling their financial affairs.
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Why is the time value of money important for an individual to understand in regard to their private life?
Time value of money means that money can grow over time. Funds on hand can be invested and will be greater in the future, depending on the returns earned (interest rate). So, money today can grow. Money you will get in the future cannot be invested and grow until you get it. So, money you have now is worth more than month in the future....mainly because you can "cook it" with interest and it will grow.
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