How are future values affected by changes in interest rates?
A) The lower the interest rate, the larger the future value will be.
B) The higher the interest rate, the larger the future value will be.
C) Future values are not affected by changes in interest rates.
D) One would need to know the present value in order to determine the impact.

Question

Quizplus · Accepted Answer

The higher the interest rate, the larger the future value will be because the amount of interest earned on the principal increases with the rate, leading to a greater accumulation of wealth over time.

How Are Future Values Affected by Changes in Interest Rates