To decrease the amount required today to fund a $10,000 debt due two years from now, you could _____ on your savings.
A) Increase the rate of interest earned
B) Decrease the number of compounding periods per year
C) Earn simple interest rather than compound interest
D) Both decrease the rate of interest and the number of compounding periods per year
E) Either decrease the rate of interest or decrease the number of compounding periods per year

Question

Quizplus · Accepted Answer

Increasing the rate of interest earned on your savings would decrease the amount required today to fund a future debt because the money would grow faster over time, reducing the initial investment needed to reach the $10,000 target in two years.

To Decrease the Amount Required Today to Fund a $10,000