For a given positive interest rate, the future value of $100 increases with the passage of time. Thus, the longer the period of time, the greater the future value.

Question

Quizplus · Accepted Answer

This statement is true. The future value of money increases with time when subjected to a positive interest rate due to the compounding effect of the interest rate. The longer the time period, the more opportunities for compounding, resulting in a greater future value.

For a Given Positive Interest Rate, the Future Value of $100