Respuesta :
For positive interest rates, the future value interest factor is always greater than 1.0
What is Future Value Interest Factor?
Future Value Interest Factor or FVIF helps in calculating the future value of cash flow (paid in the future).
- This component helps in determining the compounding effect of cash flows occurring in regular intervals in future.
- Formula of FVIF is ( 1+r )[tex]n[/tex] where r is the interest rate per period and n is the number of time periods.
- Therefore positive interest rates of FVIF is always greater than the value 1.0
- The three crucial determinants required to calculate the Future Value Interest Factor are compounding period, time period and interest rate.
- One way to do this is to use future value, which aids investors in estimating what an asset or investment may be valued in the future.
- Future value is influenced by a number of variables, including an asset's current worth, the rate of return investors anticipate, and how far into the future they wish to look.
To learn more about Future Value Interest Factor refer to:
https://brainly.com/question/26527156
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