Suppose the Discount Rate Used to Calculate the Present Value

question 210

Essay

Suppose the discount rate used to calculate the present value of an annuity is increased (leaving n and PMT unchanged). Will the annuity's present value be (pick one) (i) larger or (ii) smaller than before? Give the reason for your choice.

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Definitions:

Cervical Progression

The process of the cervix dilating and effacing (thinning) during labor, necessary for vaginal delivery.

Fetal Presentation

The position a fetus is in at the time of delivery, determined by the part of the fetus closest to the birth canal.

Stage 3

A categorization in various models that typically represents a moderate level of development, severity, or progression in a process or disease.

Delivery Placenta

The stage of childbirth where the placenta, the organ that nourished the baby in the womb, is expelled from the uterus after the baby is born.