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15 March, 15:49

The present value of a lump sum future amount:

decreases as the time period decreases.

is inversely related to the future value.

is directly related to the interest rate.

increases as the interest rate decreases.

is directly related to the time period.

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Answers (1)
  1. 15 March, 17:42
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    Answer: Increases as the interest rate decreases.

    Explanation:

    From the given options, we can state that "the present value also known as present discounted value of the lump sum future value will increase if the interest rate decrease", this is due to the fact that if in case the interest rate tends to decrease then the Present Value Factor would respectively become higher which in terms would signify that Present Value would become higher.
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Home » Business » The present value of a lump sum future amount: decreases as the time period decreases. is inversely related to the future value. is directly related to the interest rate. increases as the interest rate decreases.
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