Your Grandmother Has Promised to Give You $5,000 When You

Multiple Choice

Your grandmother has promised to give you $5,000 when you graduate from college.She is expecting you to graduate two years from now.What happens to the present value of this gift if you delay your graduation by one year and graduate three years from now?

A) remains constant
B) increases
C) decreases
D) becomes negative
E) cannot be determined from the information provided