Question

What is the definition of present value?A. the current value of a future sum of moneyB. the interest paid on a current sum of moneyC. the future value of a current sum of moneyD. the interest paid on a future sum of money

Answer 1

Answer:

The definition of present value is the current value of a future sum of money.

Choice A

Step-by-step explanation:

Present value (PV) is the current value of a future streams of cash flows or sum of money at a given expected rate of return by the investor. Future payment streams are discounted at the rate of return. The present value increases with the decrease in the rate of return or the discount rate and vice versa.