Back
Karunakar
Start, Build, Scaleย โขย 6m
Time Value of Money Motivational Quote of the Day: โDo not wait; the time will never be โjust right.โ Start where you stand and work with whatever tools you have at your command.โโโโNapoleon Hill Story: Karunakar, a young entrepreneur, had two options for a payment deal with a client. Take โน50,000 today. Take โน55,000 after one year. At first glance, โน55,000 seemed like the better deal. However, Karunakar remembered a principle he read about: Money today is worth more than money in the future. This is because you can invest the money today, earn interest or returns, and make it grow. So, he did the math. If he invested โน50,000 today at an annual return of 10%, it would grow to: โน50,000 ร (1 + 10%) = โน55,000 in one year. This meant both options were equally valuable. But if Karunakar could earn more than 10% return, the โน50,000 today would clearly be the better choice. This simple concept of comparing the value of money across time is Time Value of Money. Key Takeaways from the Story: Why Money Loses Value Over Time: Inflation and lost investment opportunities make future money less valuable than todayโs money. Core Formula: Future Value (FV) = Present Value (PV) ร (1 + rate of return)^number of years Practical Use: Use TVM to decide if you should invest, save, or spend money now versus later.
Replies (3)
More like this
Recommendations from Medial
Download the medial app to read full posts, comements and news.