An increase in future value can be caused by
A) an increase in the: annual interest rate.
B) an increase in the: number of compounding periods.
C) deferring the original investment by one or more periods.
D) both A and B.

Question

Quizplus · Accepted Answer

An increase in the annual interest rate (A) and an increase in the number of compounding periods (B) both lead to a higher future value. Deferring the original investment (C) may actually decrease the future value due to lost opportunity cost.

An Increase in Future Value Can Be Caused by