MegaMaester

Finance · Lesson 2

The Time Value of Money

beginner⏱ 13 min · 7 cards
The big idea
⏳

A dollar today beats a dollar tomorrow

Money you have now can be invested to grow — so when you get it changes what it is worth.

See it

Growth over time

ValueTime →
Interest compounds — your earnings start earning too.
Key term

Flip to learn

What is compound interest?
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Compound interest
Earning interest on both your original money and the interest it has already earned.
Nuance

Take it with you

Think like a Maester

Start early — time is the most powerful ingredient in growth.

Recap

Key takeaways

  • ✓Money today outranks money later because it can work, inflation erodes value, and the future is uncertain.
  • ✓Present value makes offers at different dates comparable.
  • ✓Simple interest grows on principal alone; compound interest grows on prior growth.
  • ✓Compounding rewards patient savers and punishes long-term borrowers.
Quick check

Which best describes what finance is about?