Question

Which of the following would increase the future value of a single cash flow?

(A) decrease in the cash flow
(B) an increase in the interest rate
(C) a decrease in the time period
(D) a decrease in the time period

Answer 1

Answer: B) an increase in the interest rate

Explanation: Future Value: it is the money that will be earned by multiplying at an interest rate.

This value depends on the cash changes generated by that asset and usually depends on the size, time and risk. For example: If $ 100 is deposited in an account that generates an annual interest rate of 10%, in one year the future value of the deposit is $ 110