The future value of an investment deposited today increases as the number of years of compounding at a positive interest rate declines.

Question

Quizplus · Accepted Answer

The future value of an investment deposited today typically increases as the number of years of compounding at a positive interest rate increases, not declines. With each additional year of compounding, the investment earns interest on the original principal as well as on the interest earned in past years. Therefore, the longer the investment is held, the greater the future value will be.

The Future Value of an Investment Deposited Today Increases as the Number