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

Question

Quizplus · Accepted Answer

The present value of an amount is determined by discounting it back to present time using a fixed interest rate. As the time period until receipt decreases, there are fewer periods for the interest to compound and therefore the present value increases.

As the Time Period Until Receipt Decreases,the Present Value of an Amount