The process whereby the value of an investment increases exponentially over time is called:
A)annual percentage rate
B)time value
C)annual percentage yield
D)compounding

Question

Quizplus · Accepted Answer

Compounding refers to the process where the value of an investment grows exponentially over time as the interest earned on the initial investment is reinvested and earns further interest. This compounding effect results in exponential growth of the investment value. Options A, B, and C do not accurately describe this process.

The Process Whereby the Value of an Investment Increases Exponentially