time value of money

Definition of "time value of money"
  1. The financial concept that money available now is worth more than the same amount in the future due to its potential earning capacity with investment and reinvestment at an understood rate of return, often referred to as the discount or investment rate
How to use "time value of money" in a sentence
  1. Financial planners base their retirement advice on the time value of money.
  2. Considering the time value of money is essential for making informed investment decisions.
  3. Estimating the future value of a college fund involves taking into account the time value of money.

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