Why Does $100 Due One Year from Now Have Less

question 119

Essay

Why does $100 due one year from now have less economic value than $100 has today? What do you need to know before you can determine the difference between the economic values of the two payments?

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Definitions:

Income Received

The amount of money or monetary value received by an individual or entity in exchange for goods provided, services rendered or as a return on investments.

Middle Three Quintiles

The segments of the population that fall into the second, third, and fourth quintiles when dividing the total population into five equal groups based on income or wealth.

Income Received

It refers to the total amount of money obtained by individuals or entities typically through employment, investments, or other sources.

Upper Quintiles

Refers to the top 20% of a population in terms of income or wealth distribution.