Why is a dollar today more valuable than a dollar a year from now?
A)The dollar today can be immediately used to buy something.
B)A dollar a year from now will likely have less purchasing power because of inflation.
C)The unknown future is riskier than the known present.
D)All of these

Question

Quizplus · Accepted Answer

All of these reasons contribute to the concept that a dollar today is more valuable than a dollar in the future. Immediate utility, inflation reducing future purchasing power, and the risk associated with the future all support the time value of money principle.

Why Is a Dollar Today More Valuable Than a Dollar