Todd will be receiving a $10,000 bonus one year from now.The process of determining how much that bonus is worth today is called:
A)aggregating.
B)discounting.
C)simplifying.
D)compounding.
E)extrapolating.

Question

Quizplus · Accepted Answer

The process of determining the present value of a future payment, such as Todd's $10,000 bonus, is called discounting. This involves calculating how much that future payment is worth today, taking into account the time value of money and the expected interest rate. Therefore, the best choice is B, discounting.

Todd Will Be Receiving a $10,000 Bonus One Year from Now.The