The future and present value factors are reciprocals. Either amount equation can be used to solve any amount problem.

Question

Quizplus · Accepted Answer

This statement is true. The future value factor (FV factor) and present value factor (PV factor) are reciprocals of each other, meaning that FV factor = 1/PV factor and PV factor = 1/FV factor. Therefore, either amount equation (future value, present value, payment, or time) can be used to solve any amount problem.

The Future and Present Value Factors Are Reciprocals