## Time value of money:

Time value of money refers to the theory which states the value of money with the passage of time. As per time value of money, monetary value of a dollar decreases as time passes.

## Answer and Explanation:

As per time value of money,

Present value = Future value / (1 + Rate)^Number of years

Here,

Present value = Value of investment today

Future value = $175,000.00 Number of years = 50 Rate = 14% = 0.14 So, Value of the amount to be received today = 175,000 / 1.14^50 =$249.92

#### Learn more about this topic:

How to Calculate Present Value of an Investment: Formula & Examples

from Introduction to Business: Homework Help Resource

Chapter 24 / Lesson 15
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