Dear All!
I am stuck with the concept of time value and present value. Can someone help. The problem is: Why is future amount of say Rs. 100 received in 2012 lower in today i.e in 2011 and by how much.
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Present value
Replies (3)
See if you have say 60 Rs. today say you can buy 1 ltr of petrol. But after 2 years you might require 100 Rs to buy the same.
The same concept is applicable in your case also.
Dear
This means that future value is lower in the future when the value of money is calculated. My question is why Rs. 100 received say in 2012 has a lower value today i.e in 2011 and by how much lower.
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