An increase in future value can be caused by an increase in the:
A)annual interest rate.
B)number of compounding periods.
C)original amount invested.
D)both A and B.
E)all of the above.

Question

Quizplus · Accepted Answer

An increase in the annual interest rate and number of compounding periods will both increase the future value. An increase in the original amount invested will only increase the future value if the interest rate and compounding periods remain the same. Therefore, the best choice is D, both A and B.

An Increase in Future Value Can Be Caused by an Increase