Question: The process for converting present values into future values is calledcompounding . This process requires knowledge of the values of three of four time-value-of-money variables.

The process for converting present values into future values is calledcompounding . This process requires knowledge of the values of three of four time-value-of-money variables. Which of the following is not one of these variables?

The inflation rate indicating the change in average prices

The interest rate (I) that could be earned by invested funds

The present value (PV) of the amount invested

The duration of the investment (N)

Investment

Interest Rate and Method

Expected Future Value

Make this investment?

X11% compound interest

Y13% compound interest

Z13% simple interest

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