Asked by Victoria Archie on Jun 10, 2024
Verified
The discounted value of a sum is its:
A) future value.
B) present value.
C) amortized value.
D) book value.
Discounted Value
Discounted value is the present value of a future amount of money or stream of cash flows given a specified rate of return, reflecting the time value of money.
Present Value
The current worth of a future sum of money, given a specific rate of return or discount rate.
Future Value
The value of an investment or cash at a specified future date, considering the interest rate or rate of return.
- Acquire knowledge on the concept of time value of money and its practical applications.
Verified Answer
DW
Deloris WilliamsJun 16, 2024
Final Answer :
B
Explanation :
The discounted value of a sum refers to its present value, which takes into account the time value of money by adjusting for the interest or discount rate. The future value of a sum refers to the value of that sum at a future point in time, and is not directly related to its discounted value. Amortized value refers to the gradual reduction of a loan or bond's principal over time, while book value refers to the value of an asset as recorded on a company's balance sheet, and is not necessarily related to its discounted value.
Learning Objectives
- Acquire knowledge on the concept of time value of money and its practical applications.