Answer the following questions:
- What happens to the future value of some fixed dollar amount invested today as the interest rate decreases? Why?
- What happens to the present value of some fixed dollar amount to be received in the future as the interest rate increases? Why?
- What happens to the present value of some fixed dollar amount to be received in the future as the time to receive the money decreases? Why?
- Which will have a higher present value, assuming the same discount rate, same # of payments, and same amount of payments, an ordinary annuity or an annuity due? Why?
- Which will have a higher future value, assuming the same discount rate, same # of payments, and same amount of payments, an ordinary annuity or an annuity due? Why?
