.Which of the following represents the future value of a present sum of money?Answer areaThe sum plus the interest earned over a specified periodThe sum multiplied by the interest rate.The sum minus the interest earned over a specified period.The sum divided by the interest rate.

The amount of money that would have to be invested today at a given interest rate overa specified period in order to equal a future amount is called__________.A) Future value. B) Present value. C) Future value interest factor. D) Present value interestfactor.

Which of the following is/are correct?• A: The interest rate, i, makes current and future currency amounts equiv-alent based on their time value.• B: The future value, FV is the present value, PV, times the future valuefactor, (1 + i)n.• C: The effective annual rate is the amount by which a unit of currencywill grow in a year with interest on interest included.

Multiple Choice QuestionWhat is the term that describes the amount to which some current amount of money will grow as interest compounds over time?Multiple choice question.future valuepresent valueprincipaltime-value of money

The amount of money that would have to be invested today at a given interest rate overa specified period in order to equal a future amount is called

Relationship between the Present and Future value of a single amount of money ▪ Let 𝑃 and 𝐹 be the present (current time period) and future (i.e. time period 𝑛) value of a single amount assuming interest rate will remain at 𝑖% per period within the entire time period considered. Then, 𝑃 and 𝐹 are related by the formula: 𝐹 = 1 + 𝑖 𝑛 ▪ Note that this formula is for a single amount, and 𝑛 is the number of periods from the future period to whatever present time in mind. ▪ Usually, the present is time zero. However, there will be instances where for purposes of calculation sake one could assume say, time period 3 as the present, and later consider time period 3 as the future to be taken to time zero. This will become clear later.