a.The future value of an investment will be larger if the investment earns 5% in

Question

a.The future value of an investment will be larger if the investment earns 5% instead of 10%.

b.The future value of an investment will be larger if the investment is for 12 years instead of 6 years.

c.The future value of a cash flow does not depend on the length of time the funds are invested.

d.The future value of an investment does not depend on the rate of return that the investment earns.

2. Which of the following statements is true?

a.The shorter the time period that funds are invested, the greater the future value.

b.The lower the discount rate that funds are invested at, the greater the future value.

c.The higher the interest rate, the slower the value of an investment will grow.

d.The longer the time period that funds are invested, the greater the future value.

a.The future value of an investment will be larger if the investment earns 5% instead of 10%.

Explanation / Answer

The Right answer of Question number 1 is (b).

"The Future value of investment will be larger if the investment is for 12 years, instead of 6 years".

This above statment is absloutely True.

The Right answer of Question number 2 is (d).

"The longer the time period that funds are invested, the greater the future value."

This statement is absloutely True.

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