The rate of interest agreed upon contractually charged by a lender or promised by a borrower is the _____ interest rate. The future value of a dollar _____ as the interest rate increases and _____ the further in the future an initial deposit is to be received. The future value of a dollar ____ as the interest rate increases and _____ the farther in the future an initial deposit is to be received increase; increase The rate of interest agreed upon contractually charges by a lender or promised by a borrow is the interest rate The future value of a dollar _____ as interest rate increases and _____ the farther in the future an initial deposit is to be received. increases ; increases Annuity due is an amount that occurs at the beginning of each period. Correct The future value of a dollar _____ as the interest rate increases and _____ the farther in the future an initial deposit is to be received. Answer Selected Answer: increases; increases. Correct Answer: increases; increases. .Question 5 .2 out of 2 points Correct What would be the future value of a loan of $1,000 for two years if the bank offered a 10% interest rate compounded semiannually?
The future value of a dollar _____ as the interest rate increases and _____ the farther in the future an initial deposit is to be received. The future value of a dollar 1. increases with higher interest rates 2. decreases with higher interest rates 3. increases as the time period increases 4. decreases as the time period increases a. 1 and 3 b. 1 and 4 c. 2 and 3 d. 2 and 4 The low interest rates increase the risk of inflation, especially increases in the costs of imported goods. Low interest rates cause the value of the dollar to drop. Consequently, it requires more dollars to buy goods that are denominated in a different currency that does not have such low interest rates.
Dec 11, 2019 Answer:B. increases; increasesExplanation:As the interest rate increases, the money invested today will bring higher interest in the future.
Chapter 3/Present Value Y 15 5. How would the future value of a mixed stream of cash flows be calculated, given the cash flows and applicable interest rate? The future value of a mixed stream of cash flows would be calculated by taking each individual cash flow, and then compounding it, using future value factors or the future B. increases; increases. Explanation: As the interest rate increases, the money invested today will bring higher interest in the future. For example if you lend $1,000 and the interest rate is 4% you will receive $1,040 after one year, if the interest rate is 6% your money will become $1,060 The future value of a dollar _____ as the interest rate increases and _____ the farther in the future an initial deposit is to be received. Inflation increases the price of goods and services over time, effectively decreasing the number of goods and services you can buy with a dollar in the future as opposed to a dollar today. If The dollar and interest rates are inextricably linked with one factor bonding the two together: the money supply. Changing the interest rate changes the money supply. Consequently, when the money supply increases or decreases, the value of the dollar changes as well. The primary party responsible for these changes is the Federal Reserve. The future value (FV) of a dollar is considered first because the formula is a little simpler.. The future value of a dollar is simply what the dollar, or any amount of money, will be worth if it earns interest for a specific time. If $100 is deposited in a savings account that pays 5% interest annually, with interest paid at the end of the year, then after the 1 st year, $5 of interest will
Chapter 3: The Time Value of Money. Just click on If the interest rate were to suddenly increase, the present value of that future amount to you would. fall. rise. The formulas for present value and future value can be modified to calculate PV and FV for continuously compounded interest rates. We note that as n increases To calculate the future value of a monthly investment, enter the beginning balance, the monthly dollar amount you plan to deposit, the interest rate you expect to Like exchange rates, interest rates are also the prices of financial assets and hence the uncertainty over the future dollar value of the investment by covering the to increase spot rate and lower the forward rate, thereby bringing the forward. The inflation rate is the average annual rate of increase in the price of goods. Inflation is interest rate in the single value discounting formula: purchasing power as dollars today – or nominal future values – i.e., values expressed in terms. Inflation is an increase in the price of goods and services. Over time market interest rates and hedge future inflation), savers (because inflation erodes the value of earnings on purchasing power (value) of a dollar decreases with inflation.