Which of the following statements is true concerning the future value of an investment?

Question

Quizplus · Accepted Answer

The future value of an investment is the expected value of the investment at a future point in time after earning a rate of return. It is calculated by multiplying the present value by one plus the rate of return raised to the power of the number of periods. Since the investment is expected to earn a positive rate of return, the future value will be larger than the present value. Therefore, option B is the correct statement. Option A is incorrect because it refers to the annuity which is a stream of equal payments received or paid at equal intervals. Option C and D are also incorrect as they contradict the fundamental principle of time value of money, which states that the value of money today is worth more than the same amount in the future.

Which of the Following Statements Is True Concerning the Future