The size of the time value of money gets
A)bigger as interest rates increase and as the time period gets longer.
B)bigger as interest rates decrease and as the time period gets longer.
C)bigger as interest rates increase and as the time period gets shorter.
D)bigger as interest rates decrease and as the time period gets shorter.

Question

Quizplus · Accepted Answer

The time value of money refers to the idea that money available now is worth more than the same amount of money at a future time. This is because money can earn interest over time. Therefore, the size of the time value of money increases as interest rates increase and as the time period gets longer since the opportunity to earn interest is greater.

The Size of the Time Value of Money Gets