How Is This Applied? - Deepstash

How to develop a healthy relationship with money

How to create a budget

The impact of emotions on financial decisions

Discover 52 similar ideas in

It takes just

# How Is This Applied?

The time value of money rule is:

"Money received today is worth more than that same amount received in future."

The time value of money is used to guide investment decisions. Before you invest, you want to know which of the options before you promises the highest profits in today’s value. To do this you would grade your investments using either of these time value factors depending on your exact situation.

1. Present value
2. Future Value

20

MORE IDEAS ON THIS

### The formula for the present value of future payments

PV= FV / (1+i)n

Where:

PV=Present value

FV=Future value

i=Interest rate

n=Number of years.

21

### 1. Present value

Calculating the present value of money answers the question;

If an investment promises to pay me a certain amount in future, how much is that sum worth today?

20

### Factors To Consider In Your Decision

Choosing the investment with the highest interest rate (returns rate) is viable but this doesn’t work in all cases, because it might be difficult to estimate the return rates on all available options.

The length of time it takes for each investment to pay their respective returns should als...

19

### The Foundations of A Successful Investment

Investment in its most simple form means “using an asset you own to generate future profits” and assets don’t always mean money; sometimes it could be time, effort, or a property you own.

With this perspective, we can consider two school kids pledging porti...

22

### 2. Future Value of money

I have a certain amount in hand today, how much is it worth in future?

20

### What You Have Learnt

• The time value of money is vital in making business decisions
• The present value of money can be used to estimate what the profit of your investment is worth in today’s terms.
• Discount rates or interest rates can be determined by considering what return you’ll get from another...

20

### Interest rates

Interest rates used in the present value or future value formula can also be called discount rate. When considering an investment, it is appropriate to use the opportunity cost of putting your money elsewhere as your interest rate.

This is calculated as:

Opportunity Cost = FO−...

21

CURATED FROM

CURATED BY

Writer, artist, Accountant and a forever learner. Learning, loving, Hoping.

These ideas explain the importance of time value considerations in making investment decisions.

Related collections

## More like this

• Know where your money is going and check for invisible leakages.
• Understand that your current scenario needs to change for the better and you have to get into your dream life.
• Invest in something worth the time and money...

### True Wealth Is Freedom

Controlling your time is the highest dividend money pays. The highest form of wealth is the ability to wake up every morning and say, “I can do whatever I want, when I want, with who I want, for as long as I want.” This is the highest dividend money pays:

• The ...

### Stoic Path To Wealth: Grow Money

Stoic investors make smart, balanced bets. Most of us invest in secure funds with low returns. Investors looking at bigger returns opt for index funds. If you are okay with losing money, that does not mean that you should.

The 90/10 investing thumb rule states that we should put 90 percent...

## Explore the World’sBest Ideas

### 200,000+ ideas on pretty much any topic. Created by the smartest people around & well-organized so you can explore at will.

#### An Idea for Everything

Explore the biggest library of insights. And we've infused it with powerful filtering tools so you can easily find what you need.

Knowledge Library

#### Powerful Saving & Organizational Tools

Save ideas for later reading, for personalized stashes, or for remembering it later.

# Personal Growth

### Organize your ideas & listen on the go. And with Pro, there are no limits.

#### Listen on the go

Just press play and we take care of the words.

#### Never worry about spotty connections

No Internet access? No problem. Within the mobile app, all your ideas are available, even when offline.

#### Get Organized with Stashes

Ideas for your next work project? Quotes that inspire you? Put them in the right place so you never lose them.

My Stashes

Join

2 Million Stashers

4.8

5,740 Reviews

App Store

4.7

72,690 Reviews

Sean Green

Great interesting short snippets of informative articles. Highly recommended to anyone who loves information and lacks patience.

Ashley Anthony

This app is LOADED with RELEVANT, HELPFUL, AND EDUCATIONAL material. It is creatively intellectual, yet minimal enough to not overstimulate and create a learning block. I am exceptionally impressed with this app!

Best app ever! You heard it right. This app has helped me get back on my quest to get things done while equipping myself with knowledge everyday.

samz905

Don’t look further if you love learning new things. A refreshing concept that provides quick ideas for busy thought leaders.

Giovanna Scalzone

Brilliant. It feels fresh and encouraging. So many interesting pieces of information that are just enough to absorb and apply. So happy I found this.

Jamyson Haug

Great for quick bits of information and interesting ideas around whatever topics you are interested in. Visually, it looks great as well.

Laetitia Berton

I have only been using it for a few days now, but I have found answers to questions I had never consciously formulated, or to problems I face everyday at work or at home. I wish I had found this earlier, highly recommended!

Ghazala Begum

Even five minutes a day will improve your thinking. I've come across new ideas and learnt to improve existing ways to become more motivated, confident and happier.

20x Faster

without
deepstash

with
deepstash

with

deepstash

Unlimited idea saving & library

Unlimited history

Unlimited listening to ideas

Personalized recommendations

Supercharge your mind with one idea per day

Enter your email and spend 1 minute every day to learn something new.

Email