What effect do interest rates have on the calculation of future and present value? How does the length of time affect future and present value? How do these two factors correlate? What is the difference between “simple interest” and “compound interest”? Which is better for the borrower and which is better for the lender?
The interest rate determines the final amount. Depending on the interest rate of the investment the amount of the future value (amount received) or present value amount needed fluctuates. If a person is offered different interest rates the high