Question

The future value of a dollar

1. increases with lower interest rates
2. increases with higher interest rates
3. increases with longer periods of time
4. decreases with longer periods of time

Answer 1

C. 2 and 3

Step-by-step explanation:

Note: Options to the question are as follows "A. 1 and 3 , B. 1 and 4, C. 2 and 3, D. 2 and 4.

FV = PV(1 + r)^t

Future value of a dollar is the value of a dollar if it earns a certain interest fro a specified time. Future value increases with an increase in interest rates and time. Conversely, it decreases with a decrease in interest rates and time.

Thus, Option c is correct.