dibya’s blogosphere

The time value of money is a simple principal to understand: basically it states that any amount of money is worth more today than the same amount of money in the future due to it’s earning potential. This means that if you have $100 to invest today, it’s worth more than $100 a year from now, because it could be gaining value through investments for a year. Let’s assume you average 9% on your investments… Your $100 today will be worth $109 in a year, whereas getting $100 a year from now is only worth about $91, due to the value of money lost in the year.