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Which of the following will increase the future value of a lump sum (for example, the FV of $500 to be received N years from
Which of the following will increase the future value of a lump sum (for example, the FV of $500 to be received N years from today). (Check all of the answer choices that are correct. This is an all or nothing question. Thus, if a and b are both correct and you do not put both of these or you include one o the other choices, you will receive 0 points). An increase in N An increase in the number of compounding periods per year (for example, the compounding changes from one time per year to 12 times per year). An decrease in the number of compounding periods per year (for example, the compounding changes from four times per year to one time per year). A decrease in N A decrease in the lump sum amount. An increase in the lump sum amount. An increase in the interest rate A decrease in the interest rate Question 7 (3.3 points) You are talking to your roommate about an investment proposal he was offered. The proposal indicated that you could double your money in 6 years. According to his reasoning, that would be an annual rate of 16.67% per year. Do you agree with his assessment that he would earn that rate? O Disagree. The true rate is 33% per year. Disagree. The true rate is only 8.33% per year. Disagree. The true rate is 12.25%. O Agree. The rate is 16.67%. None of the above are correct. Previous Page Next Page Page 7 of 30
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