Question

As time goes by, value of money changes. What may be the reason behind the changes in value of money? Which is more valuable, your money today or your money in the next 5 years? What is the pros and cons of the changes in value of money?

Answer 1

Answer:

What may be the reason behind the changes in value of money?

Value changes are the result of supply and demand. This is true with fiat currency as well as any other asset that's subject to market forces. When the supply of money increases or decreases, then the relative value of that money rises or falls with those forces. Demand for certain currencies can fluctuate, as well.

Which is more valuable, your money today or your money in the next 5 years?

Money today is worth more than tomorrow's because of inflation (on the side that's unfortunate for you) and compound interest (the side you can make work for you). Inflation increases prices over time, which means that each dollar you own today will buy more in the present time than it will in the future.

Answer 2

Answer:

your money in the next 5 years