easy · Principles of Finance time-value-of-money
What is the primary reason why a dollar today is worth more than a dollar received one year from now?
- The government requires tax payments on future income but not current income.
- Banks charge service fees on future deposits but not on current ones.
- Future dollars are always backed by more physical gold than current dollars.
- The dollar today can be invested to earn a return over the intervening period.
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