Time value of money affects all aspects of business in every industry and it has such significance in this field due to interest. With time the interest rate increases and this it affects the value. Time value of money is generally useful in day to day working. To understand the subject completely one needs to understand a lot of terms appropriately.
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The time, value and money principle says that what is the availability of money in the current time gets more value in the future time. The reason behind it is, its earning capacity is potential. This is very much effective in finance and thus said that interest is an essential part that is earned by the present amount of money.
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