The time value of money is taken into account when calculating:
I. Mortgage payments
II. Car payments
III. Future values of savings accounts
A) I only
B) I and II only
C) I, II, and III
D) I and III only

Question

Quizplus · Accepted Answer

The time value of money is a fundamental concept in finance that recognizes the fact that the value of money today is worth more than the same amount of money in the future, due to the potential earning power of that money over time. The concept is applied in many financial calculations, including mortgage and car payments, as well as the future values of savings accounts. Therefore, all three choices reflect the application of the time value of money.

The Time Value of Money Is Taken into Account When