In 3 years you are to receive $5,000. If the interest rate were to suddenly increase, the present value of that future amount to you would

I would agree with the colleagues that it would fall.

Answer is FALL <<<<<<<<<<<<<<<<

NPV will fall, if the cash inflows are spread over3 years.

THE AMOUN SHOUD REMAINED UNCHANGED. IT JUST SAYS A AMOUNT THAT WILL BE RECEIVED. IT DOES OT SAY FROM WHERE OR IF THERE IS ANY INTEREST INVOLVED.

>>>>>>> The answer will be fall.

It will Fall

Apply FVIF Formula: FV=, Po=?, n=3

For testing apply i=% and%

FV=Po (1+i)^n

first apply i=%

Po=

Than apply i=%

Po=

So with an increase in interest rates Present value falls. 

========Agree with experts

It will remain unchanged, the receiving part is fixed , only if I get it quickly I can benefit myself from the interest rates

fall

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