Question:medium

If the interest rate increases, what happens to the present value of a future amount?

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Present value and interest rates are inversely related. Think of the interest rate as a discount rate: a higher discount rate reduces the present value of future cash.

Updated On: Jun 22, 2026

It increases
It remains the same
It decreases
It becomes zero
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The Correct Option is C

Solution and Explanation

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If the interest rate increases, what happens to the present value of a future amount?

Show Hint

The Correct Option is C

Solution and Explanation

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