Questions 5 to 7 In response to a few questions regarding present value, future value, simple interest and compounding interest Grillo made the following points.

Point 1: The present value decreases as the time period increases and the interest rate is inversely related to the future value.

Pont 2: An annuity due has payments that occur at the beginning of each time period. The present value of an annuity will increase when either the amount of the annuity payment increases or the interest rate increases.

Is Grillos Point 1 most likely correct?

A. Yes

B. No,interest rate is not inversely related to the future value.

C. No,the present value does not decrease as the time period increases.