Other factors constant, the present value will be larger,
A) the smaller is the future value.
B) the higher is the interest rate.
C) the larger is the number of periods t.
D) the shorter is the time period t.

Question

Quizplus · Accepted Answer

The present value of a future amount of money is inversely related to the time period until receipt; the shorter the time period, the larger the present value, because there is less time for the discounting effect of the interest rate to apply.

Other Factors Constant, the Present Value Will Be Larger