In 3 years you are to receive $5,000. If the interest rate were to suddenly increase, the present value of that future amount to you would

Question

fall.

rise.

remain unchanged.

cannot be determined without more information.

Alex Al Yazouri · Answer

I would agree with the colleagues that it would fall.

Wasi Rahman Sheikh · Answer

Answer is FALL <<<<<<<<<<<<<<<<

Vinod Jetley · Answer

NPV will fall, if the cash inflows are spread over3 years.

miriam talavera · Answer

THE AMOUN SHOUD REMAINED UNCHANGED. IT JUST SAYS A AMOUNT THAT WILL BE RECEIVED. IT DOES OT SAY FROM WHERE OR IF THERE IS ANY INTEREST INVOLVED.

Deleted user · Answer

The present value of that future amount is Fall

Emad Mohammed said abdalla · Answer

>>>>>>> The answer will be fall.

Uzair Bhatti · Answer

It will Fall

Apply FVIF Formula: FV=, Po=?, n=3

For testing apply i=% and%

FV=Po (1+i)^n

first apply i=%

Po=

Than apply i=%

Po=

So with an increase in interest rates Present value falls.

Deleted user · Answer

========Agree with experts

Wolf Klaas Kinsbergen · Answer

It will remain unchanged, the receiving part is fixed , only if I get it quickly I can benefit myself from the interest rates

Mir Mujtaba Ali · Answer

fall

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