If interest rates increase, the present value of a given payment in the future will
A) remain the same.
B) increase.
C) decrease.
D) cause an inflation.

Name: If interest rates increase, the present value of a given payment in the future will A) remain the same. B) increase. C) decrease. D) cause an inflation.
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Question

Quizplus · Accepted Answer

When interest rates increase, the time value of money decreases, which means that money is worth less in the future. Therefore, the present value of a given payment in the future will decrease.

If Interest Rates Increase, the Present Value of a Given