A Two-Year Investment of $3500 Is Made Today at an Annual

question 106

Multiple Choice

A two-year investment of $3500 is made today at an annual interest rate of 5.75%.Which of the following statements is true?

• A)The future value would be greater if the interest rate was higher.
• B)The present value would be greater if the interest rate was higher.
• C)The future value would be greater if the interest rate was lower.
• D)The future value does not change as the interest rate changes.

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Definitions:

Purposes

The reasons for which something is done or created or for which something exists.

United States

A country located in North America, consisting of 50 states, and known for its significant influence on world politics, economy, and culture.

Witness

An individual who observes an event taking place, especially one who can give a first-hand account of it, often legally.

Will

A legal document by which a person expresses their wishes as to how their property is to be distributed at death, and names one or more persons, the executor, to manage the estate until its final distribution.