Money has time value due to the fact that if invested, it has the potential to earn more money at some point in the future.

Question

Quizplus · Accepted Answer

A dollar today is worth more than the same dollar in the distant future, due to time value of money. If you invest a dollar today, it has the potential to earn interest, which would make it worth more at some time in the future. Financial managers are aware of this time value and often try to shift some of their cash on hand into investments in interest-bearing accounts.

Money Has Time Value Due to the Fact That If