If money has a time value, then the future value of an investment will always be more than the original amount invested and the present value of an investment will always be less than the anticipated future sum of money.

Question

Quizplus · Accepted Answer

This is a basic principle of finance and the time value of money concept. The future value of an investment is calculated by applying interest or growth rates over time, while the present value is calculated by discounting the anticipated future sum of money to adjust for the time value of money.

If Money Has a Time Value, Then the Future Value