Time value of money - future value (inflation)

watch this video to understand why grandpa's breakfast costed less than yours.

Level - BASIC

Time value of money is a useful concept with several applications. Learn how to look at yesterday's money for its value today.

AUTHOR(S): Uma Shashikant


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    1.The value of money has reduced between 50 years ago and now because

  • The exchange rate has lost value
  • People spend much more nowadays
  • Prices of all goods and services have increased
  • 2.A rupee earned 10 years ago can be compared with a rupee earned today by

  • Multiplying past earnings by number of compounding years
  • Calculating discounted value of past earnings
  • Calculating future value of past earnings
  • 3.Mr.A has Rs. 1 lakh of savings just kept in cash in a safe. After 5 years of high inflation, the value of that sum will be

  • Much more than Rs.1 lakh
  • The same, because it has remained untouched in the safe
  • Much lesser than Rs.1 lakh
Sponsor Name : MoneyKraft
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