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Question 20 (0.2 points) The present value factor 1/(1+ in is the reciprocal of the future value factor (1 + i)n. True False
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Answer #1
The statement is TRUE.
Explanation:
Formula for Present Value
Present Value = Future Value * /(1+r)^n
Formula for Future Value = Present Value * (1+r)^n
which is nothing but reciprocal of present value formula which is arrived as follows
Present Value = Future Value * /(1+r)^n
1/Future Value = 1/Present Value *(1+r)^n
Future Value = Present Value * (1+r)^n
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