The greater the number of compounding periods within a year, then (1) the greater the future value of a lump sum investment at Time 0 and (2) the smaller the present value of a given lump sum to be received at some future date. a. True b. False

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Social Studies

Raiden

21 October, 06:57

The greater the number of compounding periods within a year, then (1) the greater the future value of a lump sum investment at Time 0 and (2) the smaller the present value of a given lump sum to be received at some future date. a. True b. False

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Answers (1)

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Esperanza · Answer 1

False

Explanation:

Compound interest refers to the interest charged on both the amount borrowed and previous interest

The greater the number of compounding periods within a year, then (1) the future value of a lump sum investment at Time 0 not necessarily is greater and (2) the present value of a given lump sum to be received at some future date not necessarily is smaller.

Therefore, the given statement is false.