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2. Recall the formula for Net Present Value (NPV) T NPV = Σ t=0 I(t) (1+r)t where I (t) is income at time t, r is in the individual's interest rate

and Tis the last time period. Does NPV increase or decrease if the interest rate r were to increase? How does the interest rate r relate to an individual's patience/inpatience?

Fig: 1