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Question 6 The future value of a dollar _________ as the interest rate increases and __________...

Question 6

  1. The future value of a dollar _________ as the interest rate increases and __________ the farther in the future the initial deposit is to be received.

A

increases, increases

B

decreases; increases

C

decreases; decreases

D

increases; decreases
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Answer #1

Answer: Option A is correct.

Future value=Present value*(1+interest rate)^Time period
So, if interest rate or time period increases, the future value will also increase.

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