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Discounting refers directly to a. calculations that ignore the phenomenon of compounding for the sake of ease and simplicity. b. decreases in interest rates over time, while compounding refers to increases in interest rates over time. c. finding the future value of a present sum of money. d. finding the present value of a future sum of money.

Respuesta :

Answer:

The correct answer is letter "D":  finding the present value of a future sum of money.

Explanation:

The Discount Rate is the interest rate that you need to earn on a given amount of money today to eventually end up with a given amount of money in a certain period in the future. The concept is associated with the present value of money that estates having a dollar today will be worth more than having a dollar tomorrow.

In investing, typically the higher the interest rate, the higher the risk involved with the investment and its future cash flows.

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