Present value is:
A) how much a certain amount of money that will be obtained in the future is worth today.
B) how much a certain amount of money that you have in the present will be worth in the future.
C) the process of accumulation of additional interest paid on interest that has already been earned.
D) how much a certain amount of money needs to be discounted to be meaningful.

Question

Quizplus · Accepted Answer

Present value is the amount of money that a future payment is worth today. It takes into account the time value of money, which means that a dollar today is worth more than a dollar in the future due to interest and inflation. Therefore, present value calculates how much money would need to be invested today to achieve a future payment or cash flow.

Present Value Is