When You Automate Your Savings You Are Less Likely to Spend

question 28

True/False

When you automate your savings you are less likely to spend those dollars because they never become part of the funds in your checking account.

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Definitions:

Present Value

The contemporary value of a forthcoming amount of money or cash flow stream, determined by a certain rate of return.

Discount Rate

The rate at which regional Federal Reserve Banks lend to commercial banks and other financial institutions, charged for loans obtained from the Federal Reserve's lending facility.

Present Values

The current worth of a future sum of money or stream of cash flows given a specified rate of return, taking into account the time value of money.

Future Value

The worth of a short-term asset at a certain future date, estimated based on a predicted rate of increase.