MAKALAH

( TIME IS MORE IMPORTANT THAN MONEY )

OLEH :

1. SANDI SAPUTRA

2.ANISA

3.BESSE NURUK FADILLA

4.YULIANA

5.FERDIANSYAH
 FOREWORD

Praise be to Allah Almighty for all the blessings of his blessings, so that the author can compile
this paper as well as a paper entitled "Time is more valuable than money" fulfills one of the
subjects of our religious education and manners.

This paper contains a description of time is more valuable than money. Although it has been
compiled maximally by the author, but the writer as an ordinary person is very understanding
about this paper very many shortcomings and is still far from perfect. Because the authors really
expect constructive criticism and suggestions from the readers.

great hope the author of this paper can be an inspiration or a means of helping students in
knowing about time more than money. so as I have said, hopefully readers can benefit from the
lessons of this paper.

SIWA,11 SEPTEMBER 2019

PENULIS
 TABLE OF CONTENTS

FOREWORD ................................................ .................................................. .........

TABLE OF CONTENTS ................................................ ...............................................

CHAPTER I INTRODUCTION ............................................... .....................................

BACKGROUND ................................................ ................................................

PROBLEM FORMULATION ....................................................................................... ....

DESTINATION ................................................. .................................................. ..............

CHAPTER II DISCUSSION ............................................... .................................................. ...

THEORY OF CONCEPT TIME VALUE OF

MONEY ............................................ .........................

METHODS USED TIME VALUE OF MONEY ...............

ANALYSIS ................................................. .................................................. ............

CHAPTER III CLOSING ............................................... .................................................. ...........

CONCLUSION................................................. .................................................. .....

SUGGESTIONS ........................................... .................................................. ................................
.

REFERENCES ................................................. .................................................. ..................

CHAPTER I

OPENING

1.1 Background

Time value of money or in Indonesian is called time value of money is a concept that states
that the value of money now will be more valuable than the value of money for the future.
Decision making in technical economic analysis involves a lot and determines what is
economical in the long run.

The Rp. 5,000 is currently more valuable than the Rp. 5,000 in the coming year or two. That
is caused by the interest. So it is clear that the time value of money is very important for all of us
to understand, it is very useful and it is necessary for us to judge how much is the value of
present and future money.

Therefore, money by some residents is seen as something very important. Because money
can be used as a tool to meet human needs, an easy tool for economic activity. With the money
that functions as a means of payment will facilitate the exchange of goods, so that the work is
carried out more easily.

At present, there are many new developments related to the economy, such as currency
problems, trade transaction patterns, and so on. Most people haven't realized that much yet. Not
to mention if inflation counts. If money is kept quiet, its value will decrease with inflation. Most
countries experience inflation. Financial decisions are closely related to money and time,
including investment decisions.

1.2 Problem Formulation

1. What is the concept of time of money?

2. What are the benefits or losses of time value of money?

3. What is the condition of money when compared to one, two, three and several years to come?

1.3 Purpose

a. Students can understand the meaning of value for money over time.
b. Students can know the concept of value for money over time and understand the formulas in
it.

c. Know the benefits or losses of time value of money

d. Knowing the condition of money when compared to one, two, three and several years to come

CHAPTER II

THEORY AND DISCUSSION

2.1 Theory Concept of Time Value of Money

A little review of the background time value of money or in Indonesian is called the time
value of money is a concept that states that the present value of money will be more valuable
than the value of future money or a concept that refers to differences in the value of money
caused by time difference. Decision making in technical economic analysis involves a lot and
determines what is economical in the long run. In this case, the term time value of money is
known. IDR 5,000 is more valuable now than IDR 5,000 in one or two years to come. That is
caused by the interest. So it is clear that the time value of money is very important for all of us to
understand, it is very useful and it is necessary for us to judge how much is the value of present
and future money.

Most financial decisions, both individual and business, involve time value of money as a
consideration. The purpose of management is to improve shareholder welfare and this depends in
part on the timing of cash flows. Without an understanding of the time value of money, an
understanding of finance cannot be achieved. The discussion of this problem cannot be separated
from mathematical calculations. First of all, it will be explained about simple interest, which is
then used as a starting point for understanding compound interest.

Basically the concept of Time Value of Money Says that every individual believes that the
value of money today is more valuable than later. The amount of money that will be received
from the investment at the end of the year, if we pay attention to the time value of money, then
the value will be lower at the end of next year .

If we do not pay attention to the time value of money, then the money we will receive at the
end of next year is the same value that we have now. In short, if we are told to choose to receive
money at this time or in the next week, we will definitely choose to be taken now because the
value we can get now with the next week will certainly be very different from the time value of
money.
 Time is one important factor in making a decision to determine what you will do with the
money you have, because with time there will be an opportunity to delay consumption and earn
income which we usually call interest.

2.1 Benefits

The benefit of time value of money is to find out whether the investment made can provide
benefits or not. Time value of money is useful for calculating a budget. Thus investors can
analyze whether the project can provide benefits or not. Where investors prefer a project that
provides profits every year starting the first year until the following year. So it is clear that the
time value of money is very important for all of us to understand, it is very useful and it is
necessary for us to judge how much is the value of present and future money.

2.2 Losses

The disadvantage is that people will only save their money if the bank interest rate is high,
because they assume that if the bank interest is high, the money they will receive in the future is
also high. Time value of money does not take into account the inflation rate.

2.3 Limitations of Time Value of Money

The limitation is that it will result in people only saving their money if the bank interest rate is
high, because they assume that if the bank interest is high, the money they will receive in the
future is also high. Time value of money does not take into account the inf

Contoh lain seorang pengusaha garmen ingin memperluas usahanya dengan membeli mesin-
mesin baru, memperluas area pabrik. Ia memerlukan waktu yang relatif lebih lama daripada
pengusaha restoran.Oleh karena itu, pertimbangan pokok dari keputusan investasi adalah berapa
nilai sekarang (present value) dari uang yang akan kita peroleh pada masa mendatang atau
berapa nilai uang masa mendatang (future value) dari jumlah yang diinvestasikan saat ini.

2.4 The Time Value of Money in Investment

Investment is capital expenditure for the purchase of physical assets such as factories,
machinery, equipment, and supplies, that is physical or real investment. In economic analysis, the
term investment is specifically associated with physical investment. Physical investment creates
new assets that will increase a country's production capacity, while financial investments only
transfer ownership from the existing one person or institution to another.

The investment policy will be related to the future, but in an appraisal whether or not it will be
implemented now. Thus, especially net receipts from the implementation of investments that will
be received in the future must be assessed now, whether one-time or gradual / series receipts
using the calculations above (Basri, 1989).

Revenue in the future is basically the net cash flow from the investment implementation which
will consist of:

a. Project costs / initial investment (initial outlays). These costs include costs to obtain the
investment and investment costs as well as working capital to finance the initial operation of the
investment project in question.

b. Cash flow and cash outflow during the investment project.

c. Residual value of the investment project in question.

d. Cash inflow and other cash outflows are outside the investment project implementation
process.

Investments made at this time do not necessarily generate income right now, but take time.
The higher the investment amount, the longer the grace period. For example, a restaurant
entrepreneur wants to expand his business by buying new buildings, dining tables, and new
equipment. It took less than a year to realize his wish.

Another example of a garment entrepreneur wants to expand his business by buying new
machines, expanding the factory area. It requires a relatively longer time than a restaurant
entrepreneur. Therefore, the main consideration of investment decisions is what is the present
value of the money we will get in the future or what is the future value of the amount currently
invested.

In Islam there will be no time value for money as in conventional economics. The difference in
the value of time in Islam depends on how one uses time. The more efficient and effective, the
higher the time value. The efficiency and effectiveness of time will give more benefit to people
who do it. Then whoever does it will benefit the world and the hereafter if everything he does
with the intention of worshiping Allah Subahana wata’ala.

In Islam not only seek profits in the world, but what is sought is profit in the world and in the
hereafter. Therefore, the utilization of time must not only be effective and efficient. But it must
also be based on faith. Faith is what brings benefits in the hereafter. Conversely, when faith does
not benefit in the world, it means that faith is not practiced. And isla is calling us to seek the
benefits of the hereafter but not to forget the benefits of the world.
Islam prohibits increasing ownership of money by depositing it in banks or lending it to other
people. Actually business, desire, initiative, courage to take risks is something that has a value
far higher than money which is only as an exchange rate, money only becomes capital when used
for business investment only. Money can be a capital if collaborated with other resources, money
only has a time value only when used as capital and that capital is not capital. It has been
discussed earlier that today's goods have a value higher than its value in the future, but at in fact
many events that do not match this statement.

Many people choose to save income now to face the future and they will get a higher value in
the future, there are many human motives for saving, including: future needs, children's
education, marriage, preparation for old age, illness, accident, etc. But it cannot be justified by
people who save to get interest. There is plenty of evidence that people are still continuing to
save money even though interest has caused crises in America, Britain and other European
countries.

Motivation of the world community to save to prepare for tomorrow is not only from birth, but is
stronger than that, even people who have the slightest income have a strong desire even though
he has nothing meaningful to save. But in fact every act of saving that has been carried out has
produced a strong testimony that the time value of money is just a myth.

In terms of borrowing, Islam has some basic things that must be done, someone who wants to
lend money should decide that the money is lent as a form of sympathy, money is lent to keep
from losing, or money is lent to share the results. In the first and second choices, the borrower
cannot ask for additional funds, because in the first option the money is lent as a form of
sympathy, while in the second option the money is lent only for savings and not for extra
income.

If if the borrower wants a profit, then he can intend to lend money for profit sharing with the
person lent. If the person being loaned is profitable, the results are divided based on the initial
agreement of both parties. In addition, if the person who lent the loss then the party responsible
for the loss of funds is the person who lent during the loss not because of the intentional person
who borrowed.

Basically, speculation is not prohibited in Islam, but the economic framework of Islam does not
provide room for speculators to flourish. [4] Also in Islamic economics there is no known
demand for money for speculation. Speculation in the Islamic economy is very limited in its
movements, because the Islamic financial system is the opposite of conventional systems, which
give interest to assets. In Islam, property is something that is subject to zakat if it is saved has
fulfilled its time.

Therefore, according to Islam money has no time value. But time has economic value,
depending on how it is used. Time will have economic value if it is used well and wisely. As long
as humans use their time for productive things, of course the time is more valuable, then there is
a difference in value between one person's time with another even though the amount is the
same.

2.5 METHODS USED TIME VALUE OF MONEY

a.future value
b.formula
c.present value

2.6 The importance of time value of money

Why is the time value of money important? There are at least two reasons why this is so, First,
the risk of future income is higher than current income. Second, there are opportunity costs for
future income. If the income is received now, we can invest the income (for example in savings),
and will get savings interest.

The time value of money is a central concept in financial management. There are some experts
who say that financial management is basically the application of the concept of time value of
money. Understanding the time value of money is very important in the study of financial
management. Many decisions and techniques in financial management require an understanding
of the time value of money. Capital costs, investment decision analysis (capital budgeting),
alternative fund analysis, valuation of securities, determination of debt repayment schedules,
investments, equipment purchases are examples of techniques and analysis that require
understanding the concept of time value of money.

Therefore it is important to know the concept of time from money before studying other material.
The money we have now is far more valuable than the money that will be received next year,
because the money we have now can be invested, saved or deposited which can generate interest
so that the value is higher.

ANALYSIS

At this stage it is necessary to know the market situation and conditions that will be the object of
the business, both regarding prospective products, location, consumer characteristics, market
segments that will be referenced and all aspects relating to the possibility of what business
should be made or developed.
Sources of information that can be obtained to get a picture of the potential market situation of
the business that will be developed include: Mass media (newspapers, magazines, television,
radio), internet, seeing directly in the field (market survey) or information obtained from friends
(colleagues) who manage a business.

Based on preliminary information obtained, what business will be carried out can be immediately
analyzed the possibility of implementation and feasibility. Estimates of product production
targets in srelation to business planning can be determined using forecasting methods

CHAPTER III

COVER

2.7 Conclusions and Suggestions

1. Conclusions

The concept of time value of money which basically provides an understanding of how the
value of money changes due to time factors. The factor underlying this concept is time
preference which states that a number of resources available today to enjoy are more favored by
people than the same number of day resources but are only available in the next few years (for
example, only two years to come). it is economically based on reasons,

a. The reason for inflation, namely that the inflation rate can reduce the value of money;

b. The reason is consumed, namely that with the same, if it is consumed it will provide a higher
level of enjoyment, compared to if consumed in the future;

c. The reason for storage risk is that there is an unknown risk in the future, so the practical value
of money in the future requires a greater amount. The concept of time value of money includes
future value, present value, future value of an annuity, present value of an annuity.

2.8 Suggestions

In making an investment loan, it should be calculated carefully before experiencing an error. Do

the equivalent payment method in accordance with the business or needs of the capital loan
 Referensi

1. Hariyanti, Dini. 2015. Time Value of Money. Jakarta

http://sayapm.blogspot.co.id/2015/05/time-value-of-money.html (diakses pada tanggal 19
Desmber 2016 pada pukul 21:00)

2. Julius, Ivan. 2012. Nilai Waktu Uang (Time Value of Money). Semarang
http://ivansibarani.blogspot.co.id/2012/03/nilai-waktu-uang-time-value-of-money.html (diakses
pada tanggal 19 Desmber 2016 pada pukul 21:30)

3. http://belajartanpabuku.blogspot.co.id/2013/03/pengertian-nilai-uang-terkait-dengan_4.html
(diakses pada tanggal 19 Desmber 2016 pada pukul 21:40)

4 . http://hiyakuni.blogspot.co.id/2013/05/makalah-economic-value-of-time.html (diakses pada

tanggal 19 Desmber 2016 pada pukul 22:15)

5. Habib, Hasnan. 2017. Makalah Time Value of Money. Bandung.

http://paduankuliah.blogspot.co.id/2017/04/makalah-time-value-of-money.html

6. Aulia, Rozi. 2014. Konsep Nilai Waktu dari uang

https://roziauliaalam.wordpress.com/2014/12/01/konsep-nilai-waktu-dari-uang-time-value-of-
money (diakses pada tanggal 20 Desmber 2016 pada pukul 20:05)