A rise in the discount rate cuts the present
value factor and the present value. This is for the reason
that a higher interest rate means you would have to set a
smaller amount aside today to earn a specified amount in the future. A decrease in
the time period increases the present value factor
and increases the present value. In other words, when
you earn more interest, you can capitalize less money today to have the same amount
at a given point in the future.
