Which of the following changes would increase the present value of a future payment?
A)A decrease in your salary
B)An increase in the time until the payment is made
C)A decrease in the size of the payment
D)A decrease in the interest rate

Question

Quizplus · Accepted Answer

The present value of a future payment is inversely related to the interest rate. A decrease in the interest rate increases the present value of the future payment because the money to be received in the future is discounted at a lower rate, making it worth more in today's terms.

Which of the Following Changes Would Increase the Present Value