Question

The discount rate is the interest rate used to bring ________ back to ________.

a. future dollars; present dollars

b. current dollars; present dollars

c. future interest rate; present interest rate

d. current interest rate; present interest rate

Answer 1

The discount rate is the interest rate used to bring future dollars back to present dollars.

Step-by-step explanation:

The discount rate is the interest rate used to bring future dollars back to present dollars. This means that if you have a future payment, the discount rate is used to calculate its present value. The higher the discount rate, the lower the present value of the future payment.