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How are future values affected by changes in interest rates

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Probem 1: How are future values affected by changes in interest rates?

a. The lower the interest rate, the larger the future value will be.

b. The higher the interest rate, the larger the future value will be.

c. Future values are not affected by changes in interest rates.

d. One would need to know the present value to determine the impact.

Probem 2: Which of the following statements about the future value of a dollar is true?

a. A dollar paid (or received) in the future is worth more than a dollar paid (or received) today.

b. A dollar paid (or received) in the future is worth as much as a dollar paid (or received) today.

c. A dollar paid (or received) in the future is worth less than a dollar paid (or received) today.

d. A dollar paid (or received) in the future is not comparable to a dollar paid (or received) today.

Reference no: EM132833973

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