What is meant by the value of money

The Laws of returns Difference between fixed and Concept of short run Concept of short-run total Derivation of TR, AR Concepts of short run Interest Demand for capital Supply of capital Profit Risk theory of profit Uncertainty theory of profit. Simple price index number Weighted price index.

Functions of commercial banks Concept of money market Concept of capital market Difference between Money and Topics Meaning of international trade Role of international trade Balance of trade Balance of payment Free trade Protectionism Comparative cost theory of Go back to subject.

Have a Question Ask us in our Discussion Forum. But what values are realised by the activities of public sector organisations? Whose values are they and how are they to be measured? The practical conclusion is that policy makers must frame precise aims so that at least there are some criteria with which to compare results.

Glendinning, R. Report bugs here. Please share your general feedback. You can join in the discussion by joining the community or logging in here.

Your Money. Personal Finance. Your Practice. Popular Courses. Financial Ratios Guide to Financial Ratios. Key Takeaways Time value of money means that a sum of money is worth more now than the same sum of money in the future.

This is because money can grow only through investing. An investment delayed is an opportunity lost. The formula for computing the time value of money considers the amount of money, its future value, the amount it can earn, and the time frame.

For savings accounts, the number of compounding periods is an important determinant as well. The concept of the time value of money can help guide investment decisions. Compare Accounts. The offers that appear in this table are from partnerships from which Investopedia receives compensation.

This compensation may impact how and where listings appear. Investopedia does not include all offers available in the marketplace. Related Terms Present Value of an Annuity Definition The present value of an annuity is the current value of future payments from that annuity, given a specified rate of return or discount rate.

What Is Cumulative Interest? Cumulative interest is the sum of all interest payments made on a loan over a certain time period. Continuous Compounding Continuous compounding is the process of calculating interest and reinvesting it into an account's balance over an infinite number of periods.

Future Value FV Future value FV is the value of a current asset at a future date based on an assumed rate of growth over time. What Is the Payback Period? The payback period refers to the amount of time it takes to recover the cost of an investment or how long it takes for an investor to hit breakeven.

Partner Links. Related Articles. Investopedia is part of the Dotdash publishing family.