The amount of money that you would need to invest today to yield a given future amount is called the
A)future value.
B)present value.
C)rate of discount.
D)discount factor.

Question

Quizplus · Accepted Answer

The present value is the current value of a future sum of money, and it represents the amount that needs to be invested today to achieve a certain future amount. The future value represents the value of an investment at a future point in time. The rate of discount is the rate used to calculate the present value of an investment in discounting cash flows. The discount factor is the factor used to calculate the present value of a future cash flow. Therefore, the correct answer is B) Present value.

The Amount of Money That You Would Need to Invest