Time value of money, Microeconomics

Time Value of Money

The time value of money is the price or value placed on time. It is commonly thought of as the opportunity cost related with a particular investment. Money has positive time value associated with it and in the sense in which a given amount of money is worth more than the certainty of having the exact similar sum available at a later time. The reason is that any money received today can be reinvested to earn additional profits during the intervening time period.

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