Assuming a positive interest rate, the present value of money suggests: A)$1 today = $1 in one year. B)$1 today $1 in one year. C)$1 today

Question

Assuming a positive interest rate, the present value of money suggests:
A)$1 today = $1 in one year.
B)$1 today > $1 in one year.
C)$1 today < $1 in one year.
D)$1 today ≤ $1 in one year.
E)None of the choices are correct.

Quizplus · Accepted Answer

The present value of money concept suggests that, assuming a positive interest rate, $1 today is worth more than $1 in the future due to the potential earning capacity of the money. This is because money available today can be invested and earn interest, making it worth more in the future.

Assuming a Positive Interest Rate, the Present Value of Money