________ is the amount an investment is worth discounted back to the present.

Question

Quizplus · Accepted Answer

The present value of money is the discounted value of an investment or future cash flow, which is calculated based on the time value of money principle. This principle states that money today is worth more than the same amount of money in the future because of its potential earning capacity if invested. The present value formula takes into account the interest rate, time period, and future value to arrive at the current value of an investment. Future value of money (B) is the opposite of present value and represents the value of an investment at a future date, assuming a certain interest rate. Time value of money (C) is the concept that money available at the present time is worth more than the same amount in the future due to its earning potential. Prediscounted value of money (D) is not a commonly used financial term.

________ Is the Amount an Investment Is Worth Discounted Back