earlier she then reduced it by onethird as provided in the secondschedule this represents the personal expenses of the deceased that will no longer be incurred she then applied the multiplier of 18 that is in the schedule for a person aged 22 years so the loss of dependency was estimated at 2000 x 12 x 18 432000 this math drawn from the schedule in the mva is simply wrong in both concept and principle this problem of fixing arbitrary numbers as fines punishment and compensation needs correction as it is not grounded in modern principles of finance money has time value which simply means that a rupee today will erode to become less and less valuable over time this is why many of the fines are laughable and compensations cruelly small a rupee today can also be gainfully deployed in the financial markets to grow bigger in value over time courts award a rate of interest to compensate the time lapse in making the payments while the case dragged on these rates have been arbitrarily decided even in the judgement in jayavantibens death the rates have moved form 15 to 12 and finally justice bhanumathi has awarded 9 there are cases that refer to bank lending rates to seek a basis for deciding what is appropriate in a modern economy there is a free market which can provide a reference for the fair verifiable rate of interest that should apply based on principles of fairness and equity the modern society has been able to define several social contracts betterour understanding of monetary transactions is today guided by principles of time value of money and market rates for goods services and money itselfwhat is appalling is that our courts still do not take the modern approach insurance companies approach investors with elaborate computations of human life value these computations consider time value of money and show the investor how much his future earnings would be worth they then proceed to sell a large insurance cover how is it that one set of insurers have a modern financebased rule for determining the value of human life and another set of insurers have an arcane method that simply multiplies an arbitrary income with an arbitrary multiplier is it so tough to arrive at fair compensations the author is md centre for investment education and learning