When using a future value of an annuity table:
A) payments are assumed to be made at the end of each period.
B) FVFA factors increase with an increase in the interest rate.
C) FVFA factors increase with an increase in the number of periods.
D) All of the above

Question

Quizplus · Accepted Answer

A) The future value of an annuity table assumes payments are made at the end of each period.
B) The FVFA (future value of an annuity) factors increase with an increase in the interest rate. This is because as the interest rate increases, the present value of each payment increases, which leads to a higher future value.
C) The FVFA factors also increase with an increase in the number of periods. This is because more payments are being made, and each payment contributes to the total future value.

When Using a Future Value of an Annuity Table