The future value of a cash flow is calculated using the formula FV = PV * (1 + r)^n, where PV is the present value, r is the interest rate, and n is the number of periods.

In this case, the present value (PV) is $10,000, the interest rate (r) is not specified, and the number of periods (n) is 1 year.

If the interest rate increases, the future value of the cash flow will also increase. This is because the interest rate (r) is in the multiplier of the formula. So, an increase in the interest rate will result in a larger multiplier, which will increase the future value.

For example, if the interest rate increases from 5% to 6%, the future value of the $10,000 will increase from $10,500 to $10,600.

So, an increase in the interest rate will increase the future value of the cash flow.

Question

The future value of a cash flow is calculated using the formula FV = PV * (1 + r)^n, where PV is the present value, r is the interest rate, and n is the number of periods.

In this case, the present value (PV) is $10,000, the interest rate (r) is not specified, and the number of periods (n) is 1 year.

If the interest rate increases, the future value of the cash flow will also increase. This is because the interest rate (r) is in the multiplier of the formula. So, an increase in the interest rate will result in a larger multiplier, which will increase the future value.

For example, if the interest rate increases from 5% to 6%, the future value of the $10,000 will increase from $10,500 to $10,600.

So, an increase in the interest rate will increase the future value of the cash flow.

Knowee AI · Accepted Answer

The future value of a cash flow is calculated using the formula FV = PV * (1 + r)^n, where PV is the present value, r is the interest rate, and n is the number of periods.

In this case, the present value (PV) is $10,000, the interest rate (r) is not specified, and the number of periods (n) is 1 year.

If the interest rate increases, the future value of the cash flow will also increase. This is because the interest rate (r) is in the multiplier of the formula. So, an increase in the interest rate will result in a larger multiplier, which will increase the future value.

For example, if the interest rate increases from 5% to 6%, the future value of the $10,000 will increase from $10,500 to $10,600.

So, an increase in the interest rate will increase the future value of the cash flow.

You are scheduled to receive $10 000 in one year. An increase in the interest rate will have what effect on the future value of this cash flow?

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