Personal Finance Intermediate

Time Value of Money

💡 In plain English: ₹1 today is worth more than ₹1 tomorrow — because today's rupee can be invested to earn returns.

Definition

The concept that money available now is worth more than the same amount in the future due to its potential earning capacity.

📌 Real-World Example

₹1,00,000 today at 12% p.a. = ₹1,76,234 in 5 years. So receiving ₹1L today vs ₹1.5L in 5 years — today's money could hypothetically grow to ₹1.76L at 12% (illustrative).

🔢 Formula

FV = PV × (1 + r)^n
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⚠️ Educational Content: All definitions and examples on this page are for educational and consultancy reference purposes only. They do not constitute financial, legal, or investment advice. Moneykar is not registered with SEBI, CBUAE, SCA, or any financial regulator. Consult a qualified professional before making financial decisions.

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