The relationship between the discount rate and the present value is

Question

Quizplus · Accepted Answer

The relationship between the discount rate and the present value is inverse. This means that as the discount rate increases, the present value decreases, and vice versa. This is because a higher discount rate reflects a higher opportunity cost of waiting for future payments, leading to a lower present value. Similarly, a lower discount rate implies a lower opportunity cost and a higher present value.

The Relationship Between the Discount Rate and the Present Value