Which of the following statements is true regarding the relationship between time and the value of money?
A.
Cash is worth more now than in the future because of inflation.
B.
As time passes, the value of a dollar increases.
C.
$1 is worth more today than it was twenty years ago.
D.
Cash is worth more now than in the future because of simple interest.
1 answer
The correct answer is:
A. Cash is worth more now than in the future because of inflation.
This statement reflects the concept of the time value of money, where a specific amount of money today is worth more than the same amount in the future due to factors like inflation and potential earning capacity.
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