Time Value Of Money

The time value of money is the idea that the same amount of money is worth more when received sooner rather than later. Money received earlier can be used to earn interest or profit, so $1 today has greater value than $1 received many years from now.

If someone gives you $1 today, you can use it or grow it now. If they give you the same $1 much later, it is less useful to you today.