Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Question
What do we call the process of finding present value ?
discounting
compounding
discount interest
compound interest
time value of money
Expert Solution
Step 1
The current worth of any sum is regarded as its present value. Any sum's accumulated worth in the upcoming time span is considered as its future value. The computation of future and present value is dependent on the principle of money's time worth which reveals that because the money today can be invested and grown, its worth is more than the same amount in the future.
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