What term refers to the idea that money received today is more valuable than money received in the future? Inflation Interest Time value of money Discount rate

The concept you're referring to is the time value of money, which is fundamental in finance. It’s built on the idea that money can earn interest, making a sum of money today worth more than the same amount in the future. This is due to factors like inflation, opportunity cost, and the potential for investments to grow over time. So, having a dollar today gives you options to invest or spend, and it increases in value as it earns returns. In practical terms, this principle is crucial for making informed financial decisions, such as evaluating investment opportunities, comparing loan options, or planning retirement savings. For instance, if you’re considering whether to take a lump sum payment now or receive a larger amount later, applying the time value of money can clarify which choice would yield the best financial outcome. So, always remember: waiting does come with a cost!