Which of the Following Statements Is True

question 73

Multiple Choice

Which of the following statements is true?

• A) Regardless of the value of the interest rate, increasing the compounding frequency will decrease the future value.
• B) Regardless of the value of the interest rate, increasing the compounding frequency will increase the future value.
• C) There is a relationship between the future value of investment and the effect of compounding frequency. At high interest rates, increases in compounding frequency will decrease the future value.
• D) There is a relationship between the future value of investment and the effect of compounding frequency. At low interest rates, increases in compounding frequency will decrease the future value.

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Definitions:

Mortgage Payments

Mortgage payments are regular payments made by a borrower to a lender, typically consisting of principal and interest, for the repayment of a mortgage loan used to purchase property.

Self-Employed Health Insurance

A deduction available for the premiums paid on a health insurance policy covering a taxpayer who is self-employed, their spouse, and dependents.

Individuals

Persons or entities such as single taxpayers, married couples, and heads of households that are subject to personal income tax.

Alimony

Financial payments made to a spouse or former spouse under a separation or divorce agreement.