In Chapter 1,Principle 3 Espouses the Time Value of Money

question 48

Multiple Choice

In Chapter 1,Principle 3 espouses the time value of money.Why is this principle so important to financial planning?

• A)The principle allows us to determine how much money we will need to achieve our future goals.
• B)The principle shows us how inflation impacts our money over time.
• C)The principle helps us determine our savings needs today,in order to meet our future retirement goals.
• D)The principle shows us how important time and interest rates are to the accumulation of wealth.
• E)All of the above.

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Definitions:

Metal Ores

Naturally occurring minerals from which metals can be extracted economically.

Amortization

Amortization refers to the process of gradually writing off the initial cost of an asset over a period.

Expense Account

An account that records the costs of operating a business.

Land

An asset representing the ground or property on which a business operates, not subject to depreciation.