Which One of the Following Statements Is Correct Concerning the Time

question 30

Multiple Choice

Which one of the following statements is correct concerning the time value of money?

• A)The future value of $1 at the end of two years is equal to $1 plus the first year's interest times 1 plus the annual interest rate.
• B)As the interest rate increases for any given year, the future value interest factor will decrease.
• C)The future value of $1 decreases with the passage of time.
• D)The future value interest factor is equal to zero if the interest rate is zero.