As the time period until receipt increases, the present value of an amount at a fixed interest rate
A)decreases.
B)remains the same.
C)increases.
D)Not enough information is given to tell.

Question

Quizplus · Accepted Answer

This is due to the time value of money concept in finance, where money is worth less in the future than it is today due to factors such as inflation and the opportunity cost of not being able to invest that money now. Therefore, as the time period until receipt increases, the present value of an amount decreases.

As the Time Period Until Receipt Increases, the Present Value