The relationship between a future value and its corresponding present value is determined by two variables.What are those two variables?
A)discount rate; length of compounding periods
B)discount rate; number of compounding periods
C)conversion rate; length of compounding periods
D)conversion rate; number of compounding periods

Question

Quizplus · Accepted Answer

The two variables that determine the relationship between future value and present value are the discount rate and number of compounding periods. The discount rate is the interest rate used to discount future cash flows back to their present value, and the number of compounding periods represents how frequently interest is compounded over a given period. Together, these variables determine the present value of a future cash flow.

The Relationship Between a Future Value and Its Corresponding Present