Time Value of Money

Time Value of Money

The financial concept that time is worth some amount of money. While this also applies to personal finance (such as paying a cleaner to clean your home to save yourself a few hours), it is stronger in higher-level finance and is based on liquidity. If there is a restriction that prevents you from getting back the amount you invested, that time where you do not have access to those funds is worth something, and so should offer a greater rate of return.

Return To Glossary