How might you use the principles of the time value of money to your financial benefit?

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In many cases, you can benefit financially from the concept of time-value of money. The use of compound interest can be used to increase the value and growth rate of an investment. Compounding is especially useful when you invest in bonds or stocks, where you can expect higher returns if compounding takes place.

Understanding how inflation, and other factors affect the value of each dollar at various points in time can be a great way to take advantage of time-value. If you invest $100 now, it could be significantly worth more after a couple of years due to changes in the economy. By understanding this concept, one can make better decisions over the long term about finances. They will be able to budget for their future and benefit from opportunities which may offer a higher return than originally expected.