Which of the following statements about the impact of interest rates and time on future value of money…
A decrease in the interest rate reduces the future value, holding the initial sum and investment period constant. Under compounding, future value equals the principal…
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Which of the following statements about the impact of interest rates and time on future value of money is not correct ?
Answer and explanation
Correct answer B
A decrease in the interest rate reduces the future value, holding the initial sum and investment period constant. Under compounding, future value equals the principal multiplied by (1 + r) raised to the number of periods; a higher positive rate or a longer period increases it.
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Madhya Pradesh SET (MP SET)