Busıness Fınance I Deneme Sınavı Sorusu #1270380

Which of the following statements about time value of money is correct?


Money received in the future is more valuable than money received today

The present value of some amount of money increases as interest rate increases

The future value of some amount of money decreases as number of periods increases

Annuity due payments of a loan is smaller than ordinary annuity payments of a the same amount of loan 

Money invested in compound interest rate earns more interest than money invested in simple interest rate.


Yanıt Açıklaması:

With compound interest, one can earn interest on interest earned in the previous periods (You can earn interest on interest). Thus, money invested in compound interest rate earns more interest than money invested in simple interest rate.

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