The time value of money (TVM) is the concept that money available now is worth more than the same amount of money available in the future due to its potential earning capacity, provided the rate of interest is positive. ₹ 100 today may not be equivalent to ₹ 100...
YEAR 2019: Say you get 1 kg mangoes for ₹ 100 YEAR 2020: The same 1 kg now costs ₹ 110 INFLATION in 1 Year Inflation = ₹ 110 – ₹ 100 = ₹ 10 Or (10/100)*100 = 10% So, inflation is the...
Compounding is also called ‘Interest on Interest’. In compounding, the benefit is that the interest earned is added to the principal and re-invested, therefore earning interest on the principal plus interest. And when this compounding takes place over a long duration, the return become much higher...
You take a Loan of Rs. 100 from the bank for 1 year. And the bank says you have to pay 10% Simple Interest* per...