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21 July, 02:44

Alex says that there are 3 main reasons you would like to have money in your hands today rather than waiting to hopefully receive money in the future. What causes money to have this ""time value""?

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  1. 21 July, 03:06
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    Risk, inflation and opportunity cost.

    Explanation:

    There are three main reason to have money in your hands today rather than waiting to hopefully reveive money in the future.

    The main cause money to have time value are:

    Risk Inflation Opportunity cost.

    These three factor that effect the time value of money as value of money does not remain same forever.

    Risk: We need to risk a dollar to expect more than just a dollar in return.

    Inflation: Infaltion increase price of the goods and services over time decreases your per dollar's spending power.

    Opportunity cost: It is a cost of alternate that we sacrifice to get benefit of other.
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