If the interest rate is zero, the future value interest factor equals ________.
A) -1.0
B) 0.0
C) 1.0
D) 2.0

Question

Quizplus · Accepted Answer

The future value interest factor formula is (1 + r)^n, where r is the interest rate and n is the number of periods. If the interest rate is zero, then the formula simplifies to (1 + 0)^n, which equals 1. Therefore, the future value interest factor is 1 when the interest rate is zero.

If the Interest Rate Is Zero, the Future Value Interest