Present value means that money you get in the future:

Question

a. is worth less than getting it today.
b. is going to be a multiple of what you have today.
c. is going to be converted into something that can be spent in the future.
d. is going to be worth more than it is today.

Answer 1

The correct answer is:

a. is worth less than getting it today.

This concept is rooted in the time value of money, which states that a specific amount of money today has a different value than the same amount in the future due to factors such as inflation, opportunity cost, and the potential earning capacity of the money.