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What is the relationship between an interest rate and a discount rate in time value of money calculations?

a) There is no relationship between an interest rate and a discount rate.

b) A discount rate represents how much an amount of money decreases, as in a future value calculation; an interest rate represents how much an amount of money increases, as in a present value calculation.

c) An interest rate represents how much an amount of money increases, as in a present value calculation; a discount rate represents how much an amount of money decreases, as in a future value calculation.

d) An interest rate represents how much an amount of money increases, as in a future value calculation; a discount rate represents how much an amount of money decreases, as in a present value calculation.

Accounting Basics, Accounting

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  • Reference No.:- M939167

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