TIME VALUE OF MONEY !!

Time value of money is an important concept in financial management .it can be used to compare investment alternatives and to solve problems involving loans ,mortagages,leases,saving,and annuties.time value of money is based on the concept that a rupee that you have today is worth more than the promise or expectation that you will recieve a rupee in future. money that you hold today worth more because you can invest it and earn interest.


 


for example, you can invest your rupee for one year at 6 percent annual interest rate and accumalate rs1.06 at the end of the year. a key concept of time value of money is that a single sum of money or a serious of equal,evenly spaced payments or receipts promised in the future can be converted to an equivalent value today. conversly,you can determine the value to which a single sum or a series of future payments will grow to at some future date.