Which one of these will increase the present value of a set amount to be received sometime in the future?
A) Increase in the time until the amount is received
B) Increase in the discount rate
C) Decrease in the future value
D) Decrease in the interest rate
E) Decrease in both the future value and the number of time periods

Question

Quizplus · Accepted Answer

Decreasing the interest rate (or discount rate) increases the present value of a future amount because the amount is being discounted back at a lower rate, making the present value higher.

Which One of These Will Increase the Present Value of a Set