The shorter 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) the lower the discount rate used.

Question

Quizplus · Accepted Answer

When there is a shorter length of time between a present value and its corresponding future value, it means there is less time for compound interest to accumulate. Therefore, the present value would be higher, relative to the future value.

The Shorter the Length of Time Between a Present Value