36.1k views
2 votes
$ available at today is worth more than the same amount if received in the future

User Geo Ego
by
6.9k points

1 Answer

4 votes

Answer:Money received today can grow at compound rate.

Step-by-step explanation:

The time value of the money increases based on the interest rates. So dollar earned today has more value than dollar earned tomorrow. The time value of money concept is used in financial decision making. If $1 is received today it can be invested and the rate of interest on that investment is an added value to $1.

Money can earn interest so any amount of money received today is better than receiving the same amount in the future.

User Mamsoudi
by
7.4k points