The relationship between a future value and its corresponding present value is determined by the discount rate and ________.
A)number of compounding periods
B)length of compounding periods
C)principal balance
D)time of year

Question

Quizplus · Accepted Answer

The relationship between a future value and its corresponding present value is determined by the discount rate, which is typically determined by market conditions or investor preferences, and the number of compounding periods, which refers to how frequently interest is compounded on the investment. The length of compounding periods and time of year may also affect investment returns, but are not directly related to the relationship between future and present values. The principal balance is the original amount of the investment and is not directly related to the relationship between future and present values.

The Relationship Between a Future Value and Its Corresponding Present