Using the Future Value Table, a Student Found That the Future

question 78

Multiple Choice

Using the future value table, a student found that the future value amount of $1 for 5 years at an annual interest rate of 10% is 1.611.The student also observed that the future value of $1 for 5 years at 10% compounded semiannually is 1.629.This means that

• A) the more often the compounding, the higher the future value.
• B) the student was looking in the wrong column; the second amount should be 1.611/2.
• C) there was an error in the table.
• D) when interest is compounded semiannually, more money must be deposited to have a desired ending balance.

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Definitions:

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The tendency for people to perform differently when in the presence of others than when alone, typically showing improved performance on simple or well-rehearsed tasks.

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The degree to which a person feels that another person, through mediated communication, appears to be physically present.

Social Facilitation

The tendency for people to perform differently when in the presence of others than when alone, typically improving on simple tasks and performing worse on complex tasks.

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A prestigious tennis tournament held annually in London, England, known for being the oldest tennis tournament in the world.