Which of the Following Will Decrease the Present Value of an Annuity

question 9

Multiple Choice

Which of the following will decrease the present value of an annuity?

• A) The discount rate increases.
• B) The discount rate decreases.
• C) The number of periods the annuity is received increases.
• D) The final payment increases.

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Definitions:

Conclusions

The end or finish of an event, process, or text; a judgment or decision reached by reasoning.

Valid Arguments

Logical statements where, if the premises are true, the conclusion necessarily follows.

Sound

In logic, an argument that is both valid and has all true premises.

Negative Proposition

A statement or assertion that denies something or states a position in opposition to a certain idea or claim.