Question

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

Answer #1

**The correct answer is D.**

**-----------------------------------------------------------------------------------------------------------------**

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.

*Hope this answer your query.*

*Feel free to comment if you need further
assistance.**J*

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