00:01
Hello and welcome.
00:03
This question is about the tvm or the time value of money.
00:08
And that says that in the long run, the same sum of money is worth more now than in a future date.
00:27
So essentially we're saying that if i could have $1 ,000 today or if i could have $1 ,000 in five years, i should hands down take $1 ,000 today because of the earning potential that it has and the inflation.
00:41
So earning potential and inflation.
00:48
I mean, if you've studied some inflation in the past, you know that what you can buy now for $5 is nowhere near close to all the things you could buy back in the day for $5.
01:01
But anyways, let's take a look at the option choices we have here.
01:04
So we've got four choices, a, b, c, and d.
01:11
And we want to eliminate these answer to show.
01:14
As we go to see what the true statement is going to be in accordance to this tvm theory.
01:20
And let me write this a little bit more clearly.
01:24
Okay, awesome.
01:29
So answer choice a states the value of money does not increase or decrease as time passes...