The value today of a specific sum of money to be received in the future is referred to as
A)the future value of that sum of money.
B)the present value of that sum of money.
C)compound interest.
D)the time-value of money.

Question

Quizplus · Accepted Answer

The present value of a sum of money is the current value of a future amount of money, discounted at a particular interest rate. It reflects the concept that a specific amount of money in the future is worth less than the same amount today due to its potential earning capacity.

The Value Today of a Specific Sum of Money to Be