All else held constant, the future value of a lump-sum investment will decrease if the:
A)amount of the lump-sum investment increases.
B)time period is increased.
C)interest is left in the investment.
D)interest rate increases.
E)interest is changed to simple interest from compound interest.

Question

Quizplus · Accepted Answer

Switching from compound interest to simple interest will decrease the future value because compound interest earns interest on interest, while simple interest does not.

All Else Held Constant, the Future Value of a Lump-Sum