Time Value of Money Term Paper

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Value of Money

A lot of people today think more about "stuff" than how much money it takes to buy that "stuff." Like a burger. It may be only a buck, but it takes someone working for $10 an hour ten minutes to make that much money, more if you factor in income and other taxes you pay. I'll bet it takes you less than ten minutes to eat that burger, so your time value of money is negative, which means, the item cost you more than your time to buy it. That's the idea of time value of money.

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It takes you a certain amount of time to earn it. When you think about that, you may not see your stuff the same way at all.

Here's another way to look at it. You want a new iPod. The one you want is $269.99 plus tax. Using our $10 per hour model, you'd have to work 26.99 hours to pay for your new tech toy, not including tax. For someone working part-time, that would be an entire paycheck or more. So, are you willing to work 30 hours for the iPod? When you look at.....

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