The value/purchasing power of money at a particular time is called time value of money. A rupee today is worth more than a rupee will be received tomorrow. The present money income expected at a future data is lower than the money held today.

• Money has time value. Money today is valued more because.
• Money gives liquidity, and an opportunity to invest it and earn return on it.
• Individuals, in general prefer current consumption to future consumption because the future is always uncertain and involves risk.
• Capital can be employed productivity to generate positive returns.

• In an inflationary period a rupee represses real purchasing power than a rupee a year hence.

• Since money has earning as well as purchasing power,money has time value