The longer the length of time between a present value and its corresponding future value,:
A) the lower the present value,relative to the future value.
B) the higher the present value,relative to the future value.
C) the higher the interest rate used in the present-valuation.
D) there is no difference.

Question

Quizplus · Accepted Answer

The longer the time period between present value and future value, the more time for the future value to grow with compounding interest. This means that the future value will be higher relative to the present value, and therefore the present value will be lower relative to the future value.

The Longer the Length of Time Between a Present Value