Question

Which of the following will increase the future value of a lump sum (for example, the FV of $500 to be received N years from today). (Check all of the answer choices that are correct. This is an all or nothing question. Thus, if a and b are both correct and you do not put both of these or you include one o the other choices, you will receive 0 points). An increase in N An increase in the number of compounding periods per year (for example, the compounding changes from one time per year to 12 times per year). An decrease in the number of compounding periods per year (for example, the compounding changes from four times per year to one time per year). A decrease in N A decrease in the lump sum amount. An increase in the lump sum amount. An increase in the interest rate A decrease in the interest rate

Answer 1

rate positively ..

Ans 1	correct choices are -
	An increase in the number of compounding periods per year (for example
	the compounding changes from one time per year to 12 time per year)
	Decrease in N
	Increase in lumsum amount
	Decrease in interest rate
Ans 2	We have to use financial calculator to solve this
	put in calculator-
	Lets assume that amount invested = 100
	therefore
	PV		-100
	PMT		0
	FV		200
	N		6
	compute I		12.25%
	Therefore, answer = Disagree, the true rate is 12.25%