As the interest rate increases,the present value of an amount to be received at the end of a fixed period:
A) increases.
B) decreases.
C) remains the same.
D) not enough information to tell.

Question

Quizplus · Accepted Answer

The present value of an amount to be received at the end of a fixed period decreases as the interest rate increases due to the time value of money concept. As the interest rate increases, the value of money in the present period increases, thus making future payments worth less in present terms.

As the Interest Rate Increases,the Present Value of an Amount