Discounting refers to devaluing the item from the higher future value amount to the present value amount through the consideration of interest.

Question

Quizplus · Accepted Answer

Discounting involves reducing the future value of an item to its present value by taking into account the time value of money, i.e., the interest rate at which the money can be invested. This results in a lower present value of the item.

Discounting Refers to Devaluing the Item from the Higher Future