Time Value of Money: Holy word from Non Religious book

For many people money, means survivability, independence, a new hope, a mean to pursue happiness. Money is the only religion which everyone follows irrespective of religion, caste, sex, etc. and thus everyone knows everything about money or they don’t? What if i say that no one except few handful of people knows exactly what’s the TRUE VALUE OF MONEY. In order to understand True Value of Money, it is important to know  the following basic concept relating to TIME VALUE OF MONEY, which is the building block or foundation stone to understand the secrets of money.


Money has time value in that individuals value a given amount of money more highly the earlier it is received. Therefore a small amount of money NOW may be equivalent in value to a larger amount received at a future date.

Time Value of Money is the principles governing equivalence relationships between cash flows with different dates.

The idea of equivalence relationship is relatively simple. For Example. If you pay $1,000 today and receives $900 today itself in exchange for the amount you have paid would you accept that? It is irrational to even ask, no one will accept, however say you will pay $1,000 one year after and will receive $900 now, will you accept it? the answer is yes, because a payment of $1,000 after a year would be less worth to you than paying it write now. This is the power of Time Value.

Example (TVM)

To understand the concept better in terms of its equation, it is important to understand what is interest rate, present value and future value.

Interest Rate, denoted by r, is rate of return that reflects the relationship between differently dated cash flows. Interest rates can be thought of as Required Rate of Return, Discount Rate and Opportunity Cost.

r= Real risk free interest rate + Inflation Premium + Default risk Premium + Liquidity Premium + Maturity Premium.

Present Value (PV) means the present discounted value of future cash flows: For assets, the present discounted value of the future net cash inflows that the asset is expected to generate; for liabilities, the present discounted value of the future net cash outflows that are expected to be required to settle the liabilities.

Future Value (FV) means the amount to which a payment or series of payments will grow by a stated future date.

EQUATION TO CALCULATE FV for a single cash flow:

                                                     FVN = PV(1+r)N

Where, PV  = Present Value of the investment

             FVN = Future Value of the investment N Periods from today

             r      = Rate of interest per period

             N     = Number of Compounding periods

The Fact that present value and Future value are separated in time has following important consequences:

  • We can add more amount of money only if they are indexed at the same point in time
  • For a given interest rate, the future value increases with the number of periods
  • For a given number of periods, the future value increases with the interest rate

The most important point to remember while using the above equation is that N and r must be compatible i.e. they are defined in same time unit.

(1+r)N is also known as future value factor, however, if compounding is more frequent than annual then the said is not future value factor. If compounding is more frequent than annual, then future value formula can be expressed as under:

FVN = PV(1+rs/m)mN

Where, FVN = Future Value of the investment N period from now,

              PV  = Present Value of Investment

                rs    = stated annual interest rate or quoted interest rate

              N    = Number of annual years

              m    = Number of compounding periods per year.


In all the above equation, compounding word is often used, but what exactly is compounding? Compounding means the process of accumulating interest on interest.

For example: Say you invested $100 for 2 years at interest rate of 10%, at the end of year 1 year you will receive $10 as interest, assuming the same is reinvested for 1 year at the same interest rate, at the end of year 2 you will receive the following:

Principal amount  = $100, Interest for the first year $10, Interest for the second year based on original investment = $10 and Interest for the second year based on interest earned in the first year i.e. $10 x 0.1 = $1.

The said interest earned on interest provides us the first glimpse of the phenomenon known as Compounding.

Time Value of Money and Compounding are inseparable forces, when used simultaneously is quite lethal. The importance of Compounding increases with the magnitude of interest rate.


Thus, Time Value of Money as a principle is equivalent to the principle relating to forces of nature both in terms of complexity and voluminous, by understanding, the above terminology and equation one has the foundation to understand the other principles and theories relating to time value of money.


Samsung Galaxy S9+ vs Samsung Galaxy Note 8 : Civil War

Last year, Samsung made a comeback by releasing a beast in the form of Samsung Galaxy Note 8, a phone that has to bring back the pride and respect of Note series after the devastation and mess caused by Samsung Galaxy Note 7. Note 8 was launched and as expected it turn out to be a beast in a beautiful body and was awarded “Gadget of the Year” award at India Mobile Congress. Now, Samsung has launched its S9 and S9+ featuring a great dual camera (in S9+), the Civil war between Note 8 and S9+ is as close as one can be.


There is not much of a difference in design, both the premium smartphones features the same front/back glass aluminium frame. However, Samsung has readjusted the fingerprint scanner below the camera, which is more comfortable to reach and helps to avoid accidental touch on camera, which was a major set back last year in case of Note 8.

This year Samsung has launched S9+ in three color options: Midnight Black, Lilac Purple and Coral Blue. While Samsung Galaxy Note 8 are available in Orchid Grey, Midnight Black and Deepsea Blue.

The Dimension of Galaxy Note 8 and S9+ is the closest since their inception. S9+ have a dimension of 158.1 x 73.8 x 8.5 mm (6.22 x 2.91 x 0.33 in), whereas Note 8 has a dimension of 162.5 x 74.8 x 8.6 mm (6.40 x 2.94 x 0.34 in).


Samsung Galaxy S9+ offers a 6.2″ 529 ppi infinity display with 18.5:9 display ratio whereas Note 8 features 6.3″ 521 ppi infinity display with 18.5:9 display ratio, and thus there is hardly any difference remains in terms of the screen sizes. Samsung is known for its brilliant quality display, and it has continued its brilliance this year as well. Both the smartphone display features 1440 x 2960 pixels protected with a corning gorilla glass. Both the phone features 3D touch home button as well as Always On display.


The biggest feature and decider of whether a person buys a phone or not is its camera performance. This year Samsung has shattered the critics, by bringing first ever smartphone featuring variable aperture. S9+ features a 12MP dual camera setup, an inheritance from Note 8, having a variable aperture of F2.4 for brighter environments, and F1.5 for low-light scenes. Samsung has changed the interface for camera as well which is now more organised than its predecessors. In the department of Secondary camera, Samsung has inserted 8 mp telephoto lens, which is same in both the smartphones.

Another notable improvement in the camera department is in its Video performance, S9+ features 4K at 60fps, 1080P at 120fps and 720P at 960fps. Though last year Sony has already introduced super slow motion at 960fps, S9+ is the first smartphone featuring the slow motion from Samsung. But it is to be noted that a video of 0.2 seconds can only be recorded at 960fps, which in turn converts a 0.2 seconds video to a 6 seconds video. In order to overcome the said limitation, Samsung has made S9+ capable of automatic motion detection, which sets the appropriate part of the clip in slow-motion and does ensuring the moment is perfectly captured. A manual setting is available as well, but it’s bit difficult to capture the moment, because of the extremely short moment that’s captured for slow-motion. However the said line is not applicable if you are Usain Bolt.

Samsung Galaxy Note 8 features 12MP dual camera setup of F1.7 and F2.4 static aperture and video capabilities are 2160p@30fps, 1080p@60fps, 720p@240fps.

Also, it is noteworthy to mention that DxOMARK (a trusted industry standard for camera and lens image quality measurement and ratings) has given 99 points to S9+ which is more than the points given to the camera of any other smartphone till date. To know the rating schedule please visit the said link 

Performance and Memory:

Samsung has launched S9+ with Snapdragon 845-powered processor coupled with 6gb RAM for US market, while internationally, the phone will feature the new Exynos 9810 SoC also coupled with 6gb RAM. Both of these 64-bit chipsets are built on 10nm process and have powerful octa-core CPUs. Comparing it to Note 8, S9+ definitely has an edge due to the performance of the new processor. S9+ comes with inbuilt storage of 64gb which can be extended to 400gb, whereas Note 8 has inbuilt storage of 64gb which can be extended to 256gb. S9+ also comes with the latest Android Oreo 8.0, whereas as of now Note 8 comes with Android 7.1.1, which will be upgraded to 8.0 in future.


S9+ features a 3500mAh battery whereas Note 8 features 3300mAh battery. Both the smartphone includes Fast Charger in the box , which guarantees phone will be up and running in no time. And of course, there’s also wireless charging available with both the smartphones provided you have charging pad. Thus, going by the battery size, screen size and better processor, S9+ possess a marginal better camera than Note 8.

Other Features:

S9+ features a Dolby Atmos sound on stereo speakers tuned by AKG which provide a rich and crisp sound when compared to Note 8. S9+ and Note 8 both features IP68 dust and water proof, which is a great feature especially during monsoon. S9+ also continues to possess headphone jack like its partner Note 8, which is a great relief for people having high quality wired headphones. S9+ also features AR emoji which is a cool feature to have.


Note 8 is now available for Rs.67,900/- whereas S9+ is available for pre order from at Rs.64,900/-.


Thus, overall Samsung has launched a great phone, having brilliant display, beast performance and a great camera in the form of S9+, but, when compared to Note 8, the battle is a lot tougher, on one had Note 8 features its great productivity and limitless creativity with S Pen whereas S9+ features a great camera and a new improved performance. Thus, if one wants to buy a phone now, one can surely go with either of the phone, but, if someone wants a great camera, better fingerprint sensor positioning and a new processor and doesn’t mind not having S-Pen, should go for S9+.


The above images and Videos are taken from Samsung Official Website. The Author doesn’t hold any right on the above images and videos.