As the interest rate decreases,the present value of an amount to be received at the end of a fixed period:
A) increases.
B) decreases.
C) remains the same.
D) not enough information to tell.

Question

Quizplus · Accepted Answer

As the interest rate decreases, the discount rate used to calculate the present value also decreases. A lower discount rate results in a higher present value of the amount to be received at the end of the fixed period. Therefore, the answer is (A) increases.

As the Interest Rate Decreases,the Present Value of an Amount