Which of the Following Statements Is True

question 25

Multiple Choice

Which of the following statements is true?

• A) The higher the discount rate, the higher the present value.
• B) The process of accumulating interest on interest is referred to as discounting.
• C) If money is worth 10% compounded annually, $1,100 due one year from today is equivalent to $1,000 today.
• D) If a single sum is due on December 31, 2014, the present value of that sum decreases as the date draws closer to December 31, 2014.