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

question 100

Multiple Choice

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