Time Value Of Money: Why You Should Know It?

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As a finance student, you must be aware of the time value of money. And why not? It is the basic concept of finance. So, can you write the full assignment on this topic? Well, if you don’t have the idea about it basics, you may take the finance assignment help.

However, reading this blog will also give you knowledge about the most demanding research topic of finance- “Time Value of Money.”

Meaning of TVM (Time Value of Money)

Have you heard the famous quote- “Time is money”?

It is true. Every second of our life is precious, like money. The same applies to real money too. According to this concept, the one rupee that is worth today has more value than the future.

It is because the money you have now has more potential to earn. Now, let’s see an author's definition of the time value of money.

“Time value of money refers to the fact the same money return has a higher present value if it is to be received early than it is to be received later.”

E A Kolb

In the words of a finance assignment writing expert, this concept states that money has the potential to increase its value by earning interest. So, money is worth more the sooner it is received.

What are the Reasons for the TVM?

Most of you don’t know why the time value of money exists. Haven’t you?

Well, this is what you should know before writing your finance assignment on this topic. If you don’t know the reasons, it becomes almost impossible for you to write a perfect assignment. So, instead of taking the finance assignment help only for this, let’s see the reasons.

Re-investment opportunities

Well, if a business receives its money soon and can reinvest it further. In this way, they can earn more profit.

Uncertainty and Risk

The future is uncertain, and no one can predict it accurately. Thus, if a business receives money soon, then the rumour and chance of the risk also decrease. However, if they invest a large amount for a longer time, there is a high risk for them. To know more about the risk and uncertainty, a student can take help from the finance assignment help expert. They tell you the different ways to minimize the risk for a selected project in your finance assignment.

How Does TVM Concept Work?

This concept work on the future value. In simple words, it tells the future worth of the investment opportunity. Thus, forecasting the future becomes easy. So, a company can estimate what they will get in return if they invest in a particular project. They do it with the help of investment amount, investment period, and growth rate. Also, for solving numerical problems on the same, one can take assistance from the finance assignment writing experts.

What is the Importance of TVM?

TVM is important because of the following reasons:

●     The future is uncertain. Thus, businesses face high risks while investing in different projects. Thus, with the time value of money, businesses can make better financial decisions. They can do it with the help of statistics. Do you know statistics plays an important role in finance? If not, you may get information about this with assistance from the experts who provide the statistics for business and finance assignments help experts.

●     This concept helps in comparing the two different projects. From this, businesses can know which project is better for them to invest in. Also, tell them which will give higher revenue than the other.

●     With the help of the time value of money, you may analyze a company's cost of liquidity.

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