Time value of money
General · Mathematics
Study notes
Q: ₹1000 today vs ₹1200 in 2 years at 8%. Which is better? PV of ₹1200: 1200/(1.08)² = 1200/1.1664 ≈ ₹1028.74. 1028.74 > 1000: take ₹1200 later! FV of ₹1000: 1000(1.08)² = ₹1166.40 < 1200 ✓. (Money now > money later!)