1. Future value Aa Aa The principal of the time value of money is probably the single most important concept in financial management. One of the most frequently encountered applications involves the calculation of a future value. The process for converting present values into future values is called . This process requires knowledge of the values of three of four time-value-of-money variables. Which of the following is not one of these variables? The trend between the present and future values of an investment The duration of the deposit (N) The interest rate (1) that could be earned by deposited funds The present value (PV) of the amount deposited All other things being equal, the numerical difference between a present and a future value corresponds to the amount of interest earned during the deposit or investment period. Each line on the following graph corresponds to an interest rate: 0%, 11%, or 21%. Identify the interest rate that corresponds with each line. VALUE (Dollars Fedor is willing to invest $30,000 for six years, and is an economically rational investor. He has identified three investment alternatives (X, Y, and 2) that vary in their method of calculating interest and in the annual interest rate offered. Since he can only make one investment during the six-year investment period, complete the following table and indicate whether Fedor should invest in each of the investments. Note: When calculating each investment's future value, assume that all interest is earned annually. The final value should be rounded to the nearest whole dollar. Make this investment? Expected Future Value Yes No Investment Interest Rate and Method 9% compound interest Y 12% compound interest 12% simple interest N