As the interest rate increases, determine either the amount increases or decreases. Assume that all other variables remain constant.
Monthly value for a sinking fund

A) decreases
B) increases
C) remains the same

Question

As the interest rate increases, determine either the amount increases or decreases. Assume that all other variables remain constant. ​
Monthly value for a sinking fund
​
A) decreases
B) increases
C) remains the same

Quizplus · Accepted Answer

As the interest rate increases, the monthly value for a sinking fund decreases. This is because a higher interest rate means that the fund will earn more interest over time, therefore requiring a smaller monthly contribution to reach the same savings goal.

As the Interest Rate Increases, Determine Either the Amount Increases