Discounting refers directly to
A)finding the present value of a future sum of money.
B)finding the future value of a present sum of money.
C)calculations that ignore the phenomenon of compounding for the sake of ease and simplicity.
D)decreases in interest rates over time,while compounding refers to increases in interest rates over time.

Question

Quizplus · Accepted Answer

Discounting involves finding the present value of a future sum of money by applying a discount rate (usually an interest rate). It involves factoring in the time value of money, as money received in the future is worth less than the same amount received today due to inflation and other factors.

Discounting Refers Directly to