We've learned that higher interest rates mean revenue received in the future is worth less in today's dollars and that the farther in the future revenue is received the less it is worth.

Thus far we've assumed that interest rates will remain constant but the fact is they can easily change from period to period. Suppose we want to compute the Present Value of $100 to be received 2 periods from now, but suppose we anticipate that the interest rate in the second period will be different from the rate in the first period.

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