You can purchase two three-year annuities today. One is valued at $2000, the other at $4000. The 1st annuity begins paying $1000 in a year. The 2nd annuity begins paying $1500 in two years. The interest rate is 5%. What is the PV of the portfolio?

$6613.60

$613.60

$808.12

$6808.12

Which of the following describes the relationship between present value and future value?

The higher the interest rate, the higher the present value and the lower the future value.

When one increases, the other increases, assuming all variables are constant.

When present value increases, the future value decreases, assuming all variables are constant.

The more time that passes, the higher the present value and the lower the future value.