Question

Which of the following will increase the future value of a lump sum investment? I. Decreasing the interest rate; II. Increasing the interest rate; III. Increasing the time period; IV. Decreasing the amount of the lump sum investment

Answer 1

II. Increasing the interest rate;

III. Increasing the time period;

Step-by-step explanation:

these two factors will increase the future value of a lump sum investment.

This can be explained as -

Suppose, a sum of $ 1,000 invested for 10 years @ 5 %, it will result in $ 1,628.89.

Now, if we increase the time period to 11 years, it will result in 1,710.34 And now if we increase the rate of interest to 6 %, it will result in $ 1,898.30