Which of the Following Will Decrease the Future Value of a Lump

question 12

Multiple Choice

Which of the following will decrease the future value of a lump sum investment made today assuming that all interest is reinvested? Assume the interest rate is a positive value.
I.Increase in the interest rate
II.Decrease in the lump sum amount
III.Increase in the investment time period
IV.Decrease in the investment time period

• A)I and III only
• B)I and IV only
• C)I, II, and III only
• D)II and III only
• E)II and IV only

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Definitions:

Demand Curve

A graphical representation showing the relationship between the price of a good and the quantity demanded by consumers at various prices.

Higher Price

An increase in the cost of a good or service, often reflecting factors like demand and supply changes, production costs, or market conditions.

Supply And Demand Theory

A basic economic principle that describes how the quantity of goods provided by producers and the quantity desired by consumers affect the market price and allocation of resources.

Sales Tax

A tax imposed by a government on sales of goods and services, typically calculated as a percentage of the purchase price.