As the interest rate increases, 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 increases, the discount rate used to calculate the present value also increases. This leads to a decrease in the present value of an amount to be received in the future.

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