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Someone has offered you the opportunity to purchase an IOU- The IOU will pay back a total of $500 in three years- How much would you be willing to pay for that IOU today if you want to earn an annual rate of return of 16%?

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The time value of money is the widely accepted idea that there is greater benefit to receiving a sum of money now rather than an identical sum later.


Someone has offered you the opportunity to purchase an IOU- The IOU will pay back a total of $500 in three years- How much would you be willing to pay for that IOU today if you want to earn an annual rate of return of 16%?






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