What is Time Value of Money (TVM)? The concept of Time value of money is the baseline of major finance decisions. The value of money is different at different points of time as the money can be put to productive use. The time value of money often signifies that money available at the present time is worth more than the same amount to be received in the future due to its potential earning capacity. This concept of TVM is important from decision point of view for different investors. For example: $500 today is more valuable than $500 for tomorrow. Therefore, concept TVM always influences our decision about what we intend to do with our money. Time Value of Money (TVM) Significance of Time Value of Money (TVM) in financial decision making A rupee today is more valuable than rupee after a year due to several reasons: Risk: there is uncertainty about the receipt of money in future. Investment opportunities: People often have a prefe...