How are present values affected by interest rates

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Reference no: EM131850946

Present and future values for different interest rates

Find the following values. Compounding/discounting occurs annually. Round your answers to the nearest cent.

a. An initial $200 compounded for 10 years at 7%. $

b. An initial $200 compounded for 10 years at 14%. $

c. The present value of $200 due in 10 year at 7%. $

d. The present value of $1,105 due in 10 years at 14%. $

e. The present value of $1,105 due in 10 years at 7%. $

How are present values affected by interest rates?

Assuming positive interest rates, the present value will increase as the interest rate increases.

Assuming positive interest rates, the present value will decrease as the interest rate increases.

Assuming positive interest rates, the present value will decrease as the interest rate decreases.

Assuming positive interest rates, the present value will not change as the interest rate increases.

Assuming positive interest rates, the present value will not change as the interest rate decreases.

Reference no: EM131850946

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