The idea that money "now," or in the present, is more desirable than the same amount of money in the future because it can be invested and earn interest as time goes by is referred to as "time value of money."

Question

The idea that money "now," or in the present, is more desirable than the same amount of money in the future because it can be invested and earn interest as time goes by is referred to as "time value of money." ​

Quizplus · Accepted Answer

The concept of the time value of money is based on the principle that a specific amount of money is worth more now than the same amount 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.

The Idea That Money "Now," or in the Present, Is