For a given interest rate, as the length of time until receipt of the funds increases, the present value interest factor
A) changes proportionally.
B) increases.
C) decreases.
D) remains unchanged.

Question

Quizplus · Accepted Answer

The present value interest factor is the reciprocal of the future value interest factor, and it is inversely proportional to the length of time until receipt of the funds. Therefore, as the length of time increases, the present value interest factor decreases.

For a Given Interest Rate, as the Length of Time