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If the Future Value of Annuity a Is Greater Than

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If the future value of annuity A is greater than the future value of annuity B,then the present value of annuity A must also be greater than the present value of annuity B.


Definitions:

Financial Markets

Marketplaces where individuals and entities can trade financial securities, commodities, and other fungible assets.

Loanable Funds Market

A theoretical market where borrowers and lenders negotiate interest rates for loans, which determines the supply and demand for credit in the economy.

Scarce Resources

Refers to the limited availability of resources that are used for the production of goods and services; scarcity necessitates the need for allocation decisions.

Declining Revenues

A decrease in the amount of money received from sales or services over a period of time.

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