Time Value of Money (TVM)

Would you rather $100 g i v e n t o d a y, or$ 110 given in 1 year? Which would you rather.

The question boils down to, can you use the $100 t o mak e an o t h er$ 10 within a year?

Thus we introduce a relationship between money and time. That is, future money is worth les than time today, because we can use present money to make more money over time!