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It is a wellknown fact that time is precious. Every business has started to make a profit. A small amount available today is crucial than the lump sum due in the future. This indicates that time decides the value of money.
For example, You purchase a 1kilogram silver bar for 60 INR per gram 2 years ago. Today the market rate of silver is 40 INR. This means that the silver bar you purchased has lost value. It can be otherwise too, but in general, in business, it is always advisable to focus on the current market value than to wait for the future.
Therefore, the time value of money is defined as the money that is present with any individual currently. The money that is available at the moment will allow businesses to invest it for expansion, to pay salaries for its employees, to purchase raw materials, etc. The money which is due for the future is only on papers and does not add any value in the present.
Time value of money is commonly identified as TVM by finance professionals. It is called a present discounted value as well.
Understand the time value of money importance from the following section from a financial management perspective.
The basic formula of TVM is given below 
Future Value (FV) = Present value (PV) + T
FV = PV (1 + (I/N)) ^{NT}

The two concepts of the time value of money are explained below:
You invest INR 10000 for 5 years in a bank that offers 10% annual interest. You allow it to grow cumulatively. In this case, the future value after five years can be quickly calculated using the basic simple interest formula PNR/100. Add the interest rate every rate to find the simple interest for the next consecutive interest and that is how cumulative interest is calculated.
Doing so you will get a total value of INR 14641 at the end of 5 years.
Now the question is: Is INR 10000 worth or INR 14641? This depends on the inflation rate, interest rate, and risk associated with it. If the inflation increases then it is a loss. If the interest rate goes down, then again it is a loss. Thus there is no certainty of getting INR 14641 after waiting for 5 years. Thus using INR 10000 in hand today for business is a wise decision than waiting without being sure about the market.
Let us take another example to explain when the time value of money will double. This is done by using RULE OF 72. For instance, from the above example of investing INR 10000 for 5 years with an interest of 8%, it will take 9 years to double the present value of money.
The future expected value of the company cash flow is taken and the net present value is calculated. In this model, the company’s stock price is calculated based on the current market rate. Therefore if the DDM value obtained is greater than the present trade value then company stocks are undervalued. Thus current value to money is important.
This is another common example of the time value of money. Here, one will borrow an amount for a particular interest rate. It could be floating or fixed, irrespective of the interest the business pays for the loan the current amount it obtains will help it to expand the business.