The lower the interest rate:
A) the greater the present value of a future amount.
B) the smaller the present value of a future amount.
C) the greater the level of inflation.
D) None of the statements associated with this question are correct.

Question

Quizplus · Accepted Answer

A lower interest rate means that it will take longer for an investment to grow to the same amount as it would with a higher interest rate. Therefore, the present value of a future amount is higher when the interest rate is lower.

The Lower the Interest Rate