The time value of money is based on the idea that:
A)The value of money in the future equals the interest received in the present.
B)The value of money in the future will be greater than an amount available today.
C)The value of money at present over some length of time will be reduced by inflation.
D)The future value of money will become the current value as time passes.

Question

Quizplus · Accepted Answer

The time value of money is based on the idea that money available today is worth more than the same amount in the future due to its potential earning capacity. Therefore, the value of money in the future will be greater than an amount available today. This concept is foundational to finance and investing.

The Time Value of Money Is Based on the Idea