For a given present value amount and inter in a higher future value. The TVM apps in our financial calculators With compound interest, interest is earnec also on the interest added to the account a period. The in

Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
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Which of the following is FALSE?
For a given present value amount and interest rate, a longer time period results
in a higher future value.
The TVM apps in our financial calculators use compound interest calculations.
With compound interest, interest is earned both on the original principal, and
also on the interest added to the account at the end of each compounding
period.
The interest rate used in TVM calculations might be called the "discount rate"
For a given future value amount and interest rate, a shorter the time period
results in a lower present value.
Transcribed Image Text:Which of the following is FALSE? For a given present value amount and interest rate, a longer time period results in a higher future value. The TVM apps in our financial calculators use compound interest calculations. With compound interest, interest is earned both on the original principal, and also on the interest added to the account at the end of each compounding period. The interest rate used in TVM calculations might be called the "discount rate" For a given future value amount and interest rate, a shorter the time period results in a lower present value.
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