Talk:Time value of money/Archives/2016

Regarding the opening sentence:

"The time value of money is the principle that the purchasing power of money can vary over time; money today might have a different purchasing power than money a decade later.

1. Time value of money is unrelated to purchasing power. Nothing is said in this definition about the actual meaning, which relates not to purchasing power but to nominal value.

2. "time value of money" cannot be a principle; it is a noun phrase, not a proposition. It could be called a concept, or something else that makes sense.

I could use some help in drafting a replacement. Anyone want to start it off?

Mcamp@cinci.rr.com (talk) 21:55, 24 July 2014 (UTC)

I am sure we could do better than the current replacement. The opening sentence does not seem to actually say anything. "A time value of money calculation is a calculation that solves for one of several variables in a financial problem". It does tell the reader that the "time value of money calculation" is some kind of financial calculation, but I feel like this is a tautology given the words "money" and "calculation". — Preceding unsigned comment added by Andyofmelbourne (talk • contribs) 11:37, 11 July 2015 (UTC)

I agree with the comment immediately above, and some of the previous comments too. The statement "A time value of money calculation is a calculation that solves for one of several variables in a financial problem" does not leave much impression, whether you understand TVM already or not. I will have a think, and perhaps post on this discussion page a more enlightening and eye-catching suggestion, which is at least as snappy as the current one, if I manage to come up with anything. Jonathan G. G. Lewis 08:40, 3 March 2016 (UTC) — Preceding unsigned comment added by Jonazo (talk • contribs)

Here is what I propose:

Time value of money describes the greater benefit of receiving money now rather than later. The principle of the time value of money explains why interest is paid or earned. Interest, whether it is on a bank deposit or debt, compensates the depositor or lender for the time value of money.

Time value of money problems involve the net value of cash flows at different points in time.

(etc)

I think I will just go ahead add this at the top of the article. Jonathan G. G. Lewis 09:35, 3 March 2016 (UTC) — Preceding unsigned comment added by Jonazo (talk • contribs)

It's done.

I'm not sure about the reference to Martín de Azpilcueta, which I have moved to a new History section at the top. A citation to reliable source would be handy. Jonathan G. G. Lewis 09:59, 3 March 2016 (UTC) — Preceding unsigned comment added by Jonazo (talk • contribs)