What Is Time Value of Money — and Why Is It Important?

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Would you rather get money today — or in five years from now? Most of us would choose today. While this may seem obvious, it's also backed up by an economic concept called the time value of money (TVM).

More specifically, time value of money illustrates why it's always more profitable to get money now than accept a promise for the same amount of money in the future. We'll break down why — and show you how you can use this concept to increase your profits.