As the compounding rate becomes lower and lower, the future value of inflows approaches
A) 0
B) the present value of the inflows
C) infinity
D) need more information

Question

Quizplus · Accepted Answer

As the compounding rate becomes lower and lower, the future value of inflows approaches the present value of the inflows. This is because the impact of the interest earned on the inflows becomes smaller and smaller as the compounding rate decreases. Therefore, the future value will approach the present value of the inflows.

As the Compounding Rate Becomes Lower and Lower, the Future