The Higher the Rate Used in Determining the Future Value

question 63

Multiple Choice

The higher the rate used in determining the future value of a $1 annuity,

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

---

Definitions:

Ventral Tegmental Area

A part of the brain located in the midbrain that plays a key role in the reward system and the reinforcement of behavior through the release of dopamine.

Nucleus Accumbens

A region in the brain involved in the reward circuit, associated with pleasure, reinforcement learning, addiction, and fear.

Brain's Reward Pathway

A neural pathway in the brain that releases dopamine in response to experiences perceived as rewarding, motivating repetition of those behaviors.

Tolerance

The need to take increasing amounts of a drug to get the same effect.