Asked by Beatrice Sarah Jacob on Jul 04, 2024
Verified
The "time-value of money" refers to the fact that:
A) a given amount of money becomes more valuable over time.
B) a given amount of money is more valuable the sooner it is obtained.
C) people expect monetary compensation for their labor time.
D) a given amount of money today is equivalent to a smaller amount of money in the future.
Time-Value of Money
A finance principle that suggests money available now is worth more than the same amount in the future due to its potential earning capacity.
Monetary Compensation
Payment made in the form of money as opposed to in-kind benefits or services, often referring to wages, salaries, or other forms of financial reward.
Labor Time
The amount of work hours or effort put in by employees or workers in the production of goods or services.
- Absorb the core ideas surrounding interest rates, the economic importance of the time value of money, and the availability and necessity for loanable funds in the market.
Verified Answer
JC
Jorge Carranza PenaJul 08, 2024
Final Answer :
B
Explanation :
The "time-value of money" principle states that a sum of money is worth more now than the same sum will be in the future due to its potential earning capacity. This core principle of finance holds that, provided money can earn interest, any amount of money is worth more the sooner it is received.
Learning Objectives
- Absorb the core ideas surrounding interest rates, the economic importance of the time value of money, and the availability and necessity for loanable funds in the market.