Home › BBA Finance › Financial Management › Time Value of Money › The time value of money is linked to inflation b…
The time value of money is linked to inflation because rising prices:
AFreeze what money buys
BRepay what money buys
CReduce what money buys
DRaise what money buys
Answer & Solution
Correct answer: C. Reduce what money buys
1. A sum kept idle loses ground.
2. The same rupees buy less later.
3. Inflation reduces what money buys.
_Source: OpenStax Principles of Finance 2e, Chapter 7, Time Value of Money I._
Related questions
Someone seeking the highest interest rate available should remember that investments are uA single one-time receipt or payment of cash is described as a:Because of that, 200 at a given rate compounded quarterly rather than annually will grow tWhen compounding happens more often within a year, the interest income is received:Using it at 12% a year, money doubles in about:Using the same shortcut at 6% a year, money doubles in about:Using that shortcut, savings earning 9% a year will take about how long to double?A shortcut that estimates how long money takes to double is the: