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Pooja Jeevawagol
on Dec 12, 2024

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The present value of $1 million to be received 10 years from now will

A) decrease if the interest rate rises.
B) be greater if the funds were going to be received 15 years from now.
C) be greater than $1 million.
D) increase if the interest rate were to rise from 4 percent to 8 percent.

Interest Rate

The percentage charged on a loan or paid on savings, representing the cost of borrowing or the reward for saving.

Present Value

The present value of an anticipated amount of money or series of payments, considering a certain rate of return.

  • Assess the present valuation of future money streams under varying interest rates.
  • Understand the impact of interest rate changes on the present value of future cash flows.
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RK
Rachit KhatriDec 16, 2024
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