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.
Finance · Lesson 2
The Time Value of Money
beginner⏱ 13 min · 7 cards
See it
Growth over time
Interest compounds — your earnings start earning too.
Key term
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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?
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