Asked by
Keyana Gilbert
on Nov 16, 2024
Verified
An increase in the interest rate causes a decrease in the future value of $1,000 that you have in a bank account today.
Interest Rate
The percentage of a sum of money charged for its use, typically by a bank or financial institution to borrowers, or paid to savers and investors.
Future Value
The estimated value of a current asset or investment at a specified date in the future, taking into account factors like interest rates and compounding.
- Gain insight into the relationship that exists between interest rates, and the concepts of present and future value.
Verified Answer
AB
Learning Objectives
- Gain insight into the relationship that exists between interest rates, and the concepts of present and future value.