An increase in the time to the promised future payment ________ the present value of the payment.
A)decreases
B)increases
C)has no effect on
D)is irrelevant to

Question

Quizplus · Accepted Answer

An increase in the time to the promised future payment decreases the present value of the payment. This is because the longer you have to wait to receive the payment, the less valuable it is in today's dollars due to the time value of money.

An Increase in the Time to the Promised Future Payment