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npound interest, interest is earned both on the original principal, an ne interest added to the account at the end of each compounding rest rate used in TVM calculations might be called the "discount rate en future value amount and interest rate, a shorter the time period a lower present value. nmount and interest rate a longer time neriod

npound interest, interest is earned both on the original principal, an ne interest added to the account at the end of each compounding rest rate used in TVM calculations might be called the "discount rate en future value amount and interest rate, a shorter the time period a lower present value. nmount and interest rate a longer time neriod

Essentials Of Investments
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
Problem 1PS
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Which of the following is FALSE? 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. For a given present value amount and interest rate, a longer time period results in a higher future value. Next Page Page 4 of Previous Page
Transcribed Image Text:Which of the following is FALSE? 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. For a given present value amount and interest rate, a longer time period results in a higher future value. Next Page Page 4 of Previous Page
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