Chris wants to increase the present value of a set amount to be received at sometime...

Chris wants to increase the present value of a set amount to be received at sometime in the distant future. Which of the following will do that for him?

a. Decrease in both the future value and the number of time periods

b. Decrease in the future value

c. Increase in the time until the amount is received

d. Decrease in the interest rate

e. Increase in the discount rate

Solutions

Expert Solution

PV = FV/(1 + r)ⁿ

In order to increase the present value, either FV should increase, or the discount rate and number of periods should decrease.

Hence, answer: d

jeff jeffy answered 2 years ago

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