Time value of money

Time value of money(TVM) is one of the most important part of financial management. To understand this concept, let’s take an example..suppose that your client who owes you 1000$ gives you an option that either he can pay you this money today or after 3 months. Obviously you would be more interested in getting this amount today because an amount of cash available ¬†today is more valuable than the same amount of money available in future. But why so..? The reason is simple… money earns interest over time, so it…