The present value of a future amount of money will be greater the:

Question

Quizplus · Accepted Answer

The present value of a future amount of money decreases as the amount of time before the future payment is received increases. This is because the longer you have to wait for the future payment, the more the value of money decreases due to inflation, and the more uncertain the future becomes. The interest rate and expected rate of inflation do impact the present value, but not as significantly as the amount of time.

The Present Value of a Future Amount of Money Will