Recommendations & StrategiesPregunta 57 de 100
The present value of a future sum will be lower when:
a.The discount rate is zero
b.The time period is very short
c.There is no interest
d.The discount rate is higher
Explicación
Present value falls as the discount rate rises, because future dollars are discounted more heavily. A higher rate or a longer horizon reduces present value. This time-value-of-money concept underlies bond pricing and retirement planning.
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