Small changes in interest rates have no greater impact on the future value of a short-term investment than they do on the value of a long-term investment. Hence, it is false.
The amount of interest that is due for a particular time period is known as the interest rate. It is the proportion of the amount that is borrowed, lent, or deposited by someone. The interest rate is entirely determined by the amount borrowed, lent, or deposited.
The amount which is borrowed, lent, or deposited is termed the principal amount. There is an easy formula available for calculating the interest rate. So, if there is a small change in the interest rate, it will not affect the future value of a small-term investment.
Therefore, It is false that small changes in the interest rate affect the future value of a small-term investment more than they would affect the value of a long-term investment.
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