Which of the following best explains the time value of money?
A)It is a concept that explains how inflation works.
B)It means that it's best to have money today, so it can be put to work sooner to make even more money.
C)It refers to the calculation of an amount using compound interest.
D)It is a concept that states that long-term investments are more profitable than short-term investments.

Question

Quizplus · Accepted Answer

The time value of money refers to the principle that a dollar today is worth more than a dollar in the future because it can be invested and earn interest, resulting in a greater amount of money in the future. Therefore, it's best to have money today, so it can be put to work sooner to make even more money.

Which of the Following Best Explains the Time Value of Money