how does inflation relate to the time value of money 
the value of money changes over time and several factors can affect it inflation which is the general rise in prices of goods and services has a negative impact on the future value of money that s because when prices rise your money doesn t go as far even a slight increase in prices means that your purchasing power drops so that dollar you earned in 2019 and kept in your piggy bank buys less today than it would have back then the bottom linethe future value of money isn t the same as present day dollars and the same is true about money from the past this phenomenon is known as the time value of money tvm both businesses and individuals can use the concept to make smart investment decisions 