Expression form:
The currency currently owned is more valuable than the currency of the same amount received in the future, because the currency currently owned can be invested and compound interest.
1. Relative number: the average profit rate of social capital excluding risk and inflation; That is, time value rate.
2. Absolute number: that is, time value is the real value-added amount brought by funds in the process of production and operation, that is, the product of a certain amount of funds and time value rate.
Extended data
Under the current credit currency system, the currency in circulation consists of the base currency of the central bank and the deposits derived from the commercial banking system. Due to the increasing trend of credit currency, currency depreciation and inflation have become common phenomena, and the value of existing currency is always higher than that of future currency.
Market interest rate is a reflection of loanable funds's situation and inflation level, and reflects the degree to which the value of money has declined with time. Benjamin Frank said: Qian Shengqian, the money generated will generate more money. This is the essence of the time value of money.
Baidu Encyclopedia-Time Value of Money