discussion

What advice could you give on Time value of money mentioned below? What would you do different to help improve an organization on money?

"Time is money", money is worth more in the future than in present day. Over time money can make money through interest. It can also mean the amount of time it would take to save money for a big purchase, by amount saved and interest accrued. Time may not make a difference if you do not calculate interest or inflation in advance, how much time it would take to raise that amount of money and if time would calls for a change in the amount needed; being able to assess this in advance can help a person decide if it is really worth the time to invest. As a financial manager, there are a couple concepts that must be considered when evaluating time value and money. One is future value, which refers to amount of money in an investment that will grow over time and interest. A financial manager can predict this once they know what the interest rate and how often it accrues over time, with this assessment they can predict the growth of the investment. Another way to assess and investment is in present value, present value is the current value of future amount of money. For a financial manager to determine this they would need to discount the rate, basically the opposite of figuring out the future value by going backwards. Present value allows us evaluated if money today is worth more than the same amount in the future. In one of the videos we watched for this discussion regarding saving up to buy a car could also mean money not spent today could be expected to lose its value in the future, by inflation.