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Which one of the following will produce the lowest present value interest factor? A. 6 percent interest for 5 years B. 6 percent interest for 8 years C. 6 percent interest for 10 years D. 8 percent interest for 5 years E. 8 percent interest for 10 years

Respuesta :

sadddamkashmiri801

Answer:

Option E. 8 percent interest for 10 years

Explanation:

The Formula for the Present Value Impact Factor Is

PVIF = a / (1 + r)^ n

Here

a is the future sum that is to be received

r is the discount interest rate

n is the number of years or other time period

Now if the the denominator will be higher then the Present Value Interest Factor will decrease which means the highest denominator would be at 8 percent interest for 10 years. Hence the option E is correct.

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