A two-year investment of $200 is made today at an annual interest rate of 6%. Which of the following statements is true?
A) The future value would be greater if the interest rate was higher.
B) The present value would be greater if the interest rate was higher.
C) The future value would be greater if the interest rate was lower.
D) The future value does not change as the interest rate changes.

Question

Quizplus · Accepted Answer

The future value of an investment increases with increasing interest rates. This is because a higher interest rate means that the investment earns more interest over time. Therefore, statement A is true and the other statements are false.

A Two-Year Investment of $200 Is Made Today at an Annual