Interest rates affect the present value of a future payment

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Reference no: EM13735889

1. How does an increase in interest rates affect the present value of a future payment?

2. How does an increase in the size of a future payment affect the present value of a future payment?

3. Two payments of $1,000 are to be made. One of them will be paid one year from today and the other will be paid two years from today. Which has the greater present value? Why?

Reference no: EM13735889

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