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Given some amount to be received several years in the future, if the interest rate increases, the present value of the future amount willa. Be higher.b. Be lower.c. Stay the same.d. Cannot tell.e. Be variable.

Respuesta :

andreafernandez

Answer:

B. be lower

Explanation:

the present value of the future amount will be lower

If he interest rate increases, the present value of the future amount will be lower.

What is present value?

Present value is the sum of discounted cash flows. It is the future value of an amount of money discounted at the interest rates. The higher interest rate is, the lower the present value. The lower interest rate is, the higher the present value.

For example, the present value of 1000 to be received with an interest rate of 5% in 10 years is 613.91.  The present value of 1000 to be received with an interest rate of 10% in 10 years is 385.54.

To learn more about present value, please check: https://brainly.com/question/26537392

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