At 6%, the present value of a $1 payment in 12 months is .941905. At 7%, the present value of a $1 payment in 12 months is .950342.

Name: At 6%, the present value of a $1 payment in 12 months is .941905. At 7%, the present value of a $1 payment in 12 months is .950342.
Brand: Quizplus
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Question

Quizplus · Accepted Answer

The present value of a future payment decreases as the discount rate increases. Therefore, at 7%, the present value should be less than at 6%, not more.

At 6%, the Present Value of a $1 Payment in 12