TIME IS MONEY

LEARNING CENTRE | The value of money today is worth more than in the future because there is an opportunity cost to waiting for it

- Narayan Krishnamurthy

Suppose you are given the choice to take Rs 10,000 today or Rs 11,000 after a year? Most people would take Rs 10,000 right away because who knows if there will be money to be taken a year later. Now a financially savvy individual is likely to do the basic math that for Rs 10,000 of today to become Rs 11,000 a year later means that the money has to grow at 10 per cent for a year. Based on this new information, one may opt for the second option if 10 per cent gain is a good deal, and if not, stick to taking Rs 10,000 today and use it the way they feel best.