According to the concept of the time value of money, the time passed by money has value. The time value of money is to reward the role that money brings in making a need fulfilled or an investment opportunity can be run at this time, not in the future. With the fulfilment of needs at this time, the utility obtained is higher. Likewise, with the running of an investment opportunity at this time, profit can be realised. Therefore, a return is given on savings, and a cost is charged on financing as a return for the fund owner.
The time value of money is equal to the utility obtained by a household from consuming early or the profit earned by a firm by running an investment opportunity. The availability of money allows the household and firm to obtain the utility or profit. The time value of money is only known later. Ex ante, we can only estimate the time value of money, which is equal to the utility or profit expected to be obtained by consuming early or running an investment opportunity. We do not know the exact time value of money. Only then, after goods and services are consumed and profit is earned from an investment, ex post, we know the time value of money. Based on that, the return for the time value of money should be given after the money is used and the time value of the money is known.