shilpi (student) (780 Points)
19 October 2019Money in future is worth less than similar money today...
Can anyone explain above statement through financial tables?
FV of Rs 1 @ 1℅ at year end 1.010
means PV is 1 (value of money at present) and then add interest 1℅
Dhirajlal Rambhia
(SEO Sai Gr. Hosp.)
(160609 Points)
Replied 19 October 2019
You have only considered the interest appreciation. The combined effect will be with inflation rate, which reduces the purchasing power of money. For example check the Cost Inflation Index which was 100 for FY 2001-02, but 289 for FY 2019-20.
shilpi
(student)
(780 Points)
Replied 20 October 2019
Thankyou so much sir... I understood.. I didn't consider Risk, uncertainty along with nflation rate factor...
CAclubindia
