Where is the answer in the book? I see this a great answer but I want to see it in the book too....

How are the present value and future value related?" (Cornett, Adair, & Nofsinger, 2016, p. 95).

Thefuture value(FV) measures the nominal future sum of money that a given sum of money is "worth" at a specified time in the future assuming a certaininterestrate, or more generally, rate ofreturn. The FV is calculated by multiplying thepresent valueby the accumulation function.

PV and FV vary jointly: when one increases, the other increases, assuming that the interest rate and number ofperiodsremain constant.

Astheinterestrate(discountrate)andnumberofperiodsincrease,FVincreasesorPVdecreases.

Explain why a dollar is worth more today than a dollar received a year from now.

Thetimevalueofmoney,orTVM,assumesadollarinthepresentisworthmorethanadollarinthefuturebecauseofvariablessuchasinflationaandinterestrates.Inflationisthegeneralincreaseinprices.Thevalueofmoneydepreciatesastimegoesbyasaresultofachangeinthegenerallevelofprices