How is the time value of money typically expressed?

The time value of money is typically expressed as a concept of opportunity cost because it emphasizes the notion that money available today can be invested to earn a return over time, whereas money received in the future means forgoing the opportunity to invest it now. This principle illustrates that the value of money changes over time due to the potential earning capacity, reflecting how much income could be generated if that money were invested immediately.

Understanding the time value of money helps individuals and businesses make informed financial decisions, such as when to invest, save, or incur debt. The focus on opportunity cost underscores the importance of considering not just current funds but also the future value of money, which is a foundational concept in finance. Other choices do not directly capture this critical relationship between time and money's value in terms of potential returns.