The Higher the Rate Used in Determining the Future Value

question 35

Multiple Choice

The higher the rate used in determining the future value of an annuity,

• A) the smaller the future value at the end of the period.
• B) the greater the future vale at the end of the period.
• C) the greater the present value at the beginning of the period.
• D) none of these-the interest rate has no effect on the future value of the annuity.

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Definitions:

Essential Strategy

A fundamental plan or set of principles designed to achieve a major goal or objective.

Direct Approach

A method of communication or problem-solving that is straightforward and tackles an issue or objective head-on, without avoidance.

Persuasive Messages

Communications designed to convince or influence an audience to take a specific action or adopt a particular belief by appealing to reason or emotion.

Analogy

A comparison between two things, typically on the basis of their structure and for the purpose of explanation or clarification.