Money received today is worth more than money that will be received in the future. This principle is known as
A) inflation.
B) time value of money.
C) depreciation.
D) decreased worth.
E) minimizing value.

Question

Quizplus · Accepted Answer

The principle that money received today is worth more than money that will be received in the future is known as the time value of money. This principle is based on the idea that money can earn interest or other forms of return over time, so delaying receipt of funds means missing out on potential earnings. Understanding the time value of money is important in financial decision-making, particularly when evaluating investment options, loan terms, and other financial opportunities.

Money Received Today Is Worth More Than Money That Will