5 Questions
Why would someone prefer to receive $100 today instead of one year from today?
Because they can spend the money now and get immediate satisfaction
What is the time value of money?
The value at which you are indifferent to receiving money today or one year from now
If someone is offered $100 today or $105 a year from now, which option would they most likely choose according to the text?
$100 today
What is one benefit of receiving money today instead of one year from now, even if someone decides to save the money?
They can deposit the money in a bank and earn interest on it
What is the rational decision when offered $100 today or $105 a year from now?
To choose $100 today
Test your knowledge on the time value of money with this quiz. Learn how the concept impacts financial decisions and discover the benefits of receiving money now versus in the future.
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