Briefly Discuss the Relationship Between Present Value and Each of the Following

question 57

Essay

Briefly discuss the relationship between present value and each of the following:
a) future value
b) time
c) interest rate

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Definitions:

Economics

The social science that studies how individuals, governments, firms, and nations make choices on allocating scarce resources to satisfy their unlimited wants.

Predictable

Able to be foreseen or declared in advance; capable of being predicted.

Absolute Value

The non-negative value of a real number without regard to its sign; it represents the distance of a number on the number line from the origin.

Budget Line

A graphical representation of all possible combinations of two goods which a consumer can afford given their income and the prices of the goods.