The present value of a lump-sum future amount:
A)increases as the interest rate decreases.
B)decreases as the time period decreases.
C)is inversely related to the future value.
D)is directly related to the interest rate.
E)is directly related to the time period.

Question

Quizplus · Accepted Answer

The present value of a future amount increases as the interest rate decreases because the discounting effect is lessened, making the present value higher.

The Present Value of a Lump-Sum Future Amount