Money's future value

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Manish (Querist)

07 February 2014 Is it only me who think Time Value of Money can only decrease over time? Isn't it possible that money will get stronger in the future. Can not the Present Value Interest Factor be (1+r)^t rather than (1/r)^t every time? Please provide the rationale behind all this?
Thank you

Nikhil Kaushik

Nikhil Kaushik (Expert)

08 February 2014 time value is not linked to the inflation or currency fluctuation friend...you are mixing two issues.

Manish

Manish (Querist)

08 February 2014 Sorry mate i think you didnt got my question. I wanna know what is the rationale behind Discounting the money to reach its future value(implying Weakening Money in future). Isn't it possible Money can get stronger in the future?

CS,CA F,Numrologi TusharSampat

CS,CA F,Numrologi TusharSampat (Expert)

13 February 2014 There are many practical factors and reason behind rupee fluactuation...

Nikhil Kaushik

Nikhil Kaushik (Expert)

13 February 2014 dear Manish it reflects only the passage of time...USD/INR 40 today is not same as USD/INR 40 tomorrow as inflation creeps in and you lose the opportunity to invest the money (if you had it today in your hand) in better opportunities.

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