The process of converting an amount given at the present time into a future value is called:
A) time value of money.
B) discounting.
C) compounding.
D) None of the above.

Question

Quizplus · Accepted Answer

The process of converting an amount given at the present time into a future value is called compounding. This is because the present value amount is being compounded over a certain period of time to reach the future value. Time value of money refers to the concept of the value of money changing over time, while discounting is the process of finding the present value of a future amount.

The Process of Converting an Amount Given at the Present