As the time period until receipt of an amount of money increases,the present value of the amount at a fixed interest rate
A) remains the same.
B) increases.
C) decreases.
D) not enough information to make a decision.

Question

Quizplus · Accepted Answer

As the time period until receipt of an amount of money increases, the present value decreases at a fixed interest rate. This is due to the time value of money concept, which states that money available now is worth more than the same amount of money in the future. Therefore, the longer it takes to receive the money, the less it is worth in the present.

As the Time Period Until Receipt of an Amount of Money