The present value of $100 to be paid in two years is less than the present value of $100 to be paid in three years.

Name: The present value of $100 to be paid in two years is less than the present value of $100 to be paid in three years.
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Question

Quizplus · Accepted Answer

The present value of a sum of money to be received in the future decreases as the time to receipt increases, due to the time value of money. Therefore, $100 to be paid in two years has a higher present value than $100 to be paid in three years.

The Present Value of $100 to Be Paid in Two