The variables in a future value of a lump sum problem include all of the following, except:

• A. Number of Periods (n)
• B. Present Value (PV)
• C. Interest Rate (r)
• D. Periodic Payment (PMT)

Answer: (D)

Verified step by step guidance

1. Understand the concept of the future value of a lump sum. It refers to the value of a single amount of money invested today at a given interest rate over a specified number of periods.
2. Identify the key variables involved in the calculation of the future value of a lump sum. These include: Number of Periods (n), Present Value (PV), and Interest Rate (r).
3. Recognize that the formula for the future value of a lump sum does not include Periodic Payment (PMT). The formula is typically expressed as: ${\mathrm{FV}}_{}={\mathrm{PV}}_{}\times {(}^1$, where FV is the future value, PV is the present value, r is the interest rate, and n is the number of periods.
4. Clarify that Periodic Payment (PMT) is a variable used in annuity problems, not in lump sum problems. An annuity involves a series of equal payments made at regular intervals, whereas a lump sum is a single payment or investment.
5. Conclude that the correct answer to the problem is Periodic Payment (PMT), as it is not a variable used in the future value of a lump sum calculation.