What decisions do you make that involve time value of money calculations?

In many areas of my life, I use time value calculations. There are even some decisions that I take on a daily basis. When planning my retirement I must consider the amount of money that needs to be set aside each month because inflation will reduce the value of the savings. To estimate the amount I need to save now to reach my desired retirement income, I calculate using present and future value equations.

In addition, when I make large purchases like a new car or house, interest rates are also important, as they have the potential to significantly affect total repayment cost. Calculating monthly mortgages or amortization of loans, etc. is a good example.

Finally, if I’m considering investing any additional funds then once again understanding how compounding works is key since even small changes in rate can have huge implications down the line; this can help me determine whether short-term investments with low return but quick turnaround times may be more beneficial than long-term ones with higher yields but extended waiting periods.