All else constant,the present value will __________ as the period of time decreases,provided there is an interest rate greater than zero.
A)remain constant
B)decrease
C)increase
D)either remain constant or decrease
E)either remain constant or increase

Question

Quizplus · Accepted Answer

As the period of time decreases, the present value increases because the money is discounted over a shorter period, reducing the impact of the interest rate.

All Else Constant,the Present Value Will __________ as the Period