When calculating present value, as t becomes larger and because r≥0, a_t / (1 + r)ᵗ goes to A) zero B) positive infinity C) negative infinity

Name: When calculating present value, as t becomes larger and because r≥0, a t / (1 + r)ᵗ goes to A) zero B) positive infinity C) negative infinity
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Question

Quizplus · Accepted Answer

As t becomes larger, the denominator of the fraction (1+r)^t approaches infinity while the numerator remains constant. Thus, the fraction approaches zero.

When Calculating Present Value, as T Becomes Larger and Because