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With respect to the time value of money, the future value relationship to the rate of...

With respect to the time value of money, the future value relationship to the rate of interest is best described as:

a. none of the answers is correct

b. logarithmic

c. a negative relationship

d. a positive relationship

e. no relationship

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Homework Answers

Answer #1

The correct answer is D.

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FV = PV (1 + interest rate) ^Time

This is the formula of future value calculation, if there is an increase in the interest rate, the FV will also increase, and vice versa.

So there is a positive relationship between FV and interest rate.

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Hope this answer your query.

Feel free to comment if you need further assistance. J

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